Donors can contribute non-cash gifts as well, including vehicles that may be used by the church. The Internal Revenue Code includes provisions regarding donations of vehicles that must be carefully followed.
If the church subsequently uses the vehicle for ministry purposes, all is well. However, if it is transfered to a church employee in lieu of cash compensation it represents taxable compensation at its fair market value. Unfortunately, the value will be taxable for both federal income tax and self-employment (social security) tax purposes.
The gift of a car to an individual is neither deductible by the donor nor taxable to the recipient.
Any business use that the donee makes of the car in 2008 is eligible for a business deduction at $.505 per mile. The only additional write-off available to the donee for business use is for tolls.