Donating your car through the American Cancer Society Cars For A Cure Program is a powerful way to support cancer research and patient programs. Beyond the rewarding feeling of contributing to a vital cause, did you know your car donation can also qualify you for a significant tax deduction? Understanding the tax benefits can further incentivize your generosity and maximize the impact of your donation.
The IRS has specific guidelines regarding tax deductions for vehicle donations to charities. It’s important to be aware of these rules to accurately claim your deduction. In 2005, the IRS adjusted the regulations to prevent inflated deductions based on overvalued vehicles. Now, the amount you can deduct is directly linked to the actual selling price of your donated vehicle.
For vehicles sold for under $500, donors can deduct the fair market value (FMV) of the car, up to $500. Fair market value is generally understood as the vehicle’s worth in the open market. Resources like Kelley Blue Book, NADA Guides, or Edmunds can help you determine your car’s approximate fair market value. While the American Cancer Society cannot legally provide this valuation, these independent resources are readily available to you.
After your car is sold, the American Cancer Society, as the recipient charity, is required by the IRS to furnish you with a “contemporaneous written acknowledgment” or receipt within 30 days of the sale. This crucial document will contain the gross selling price if your vehicle sold for more than $500, along with essential details such as the year, make, model, and Vehicle Identification Number (VIN). The receipt will also affirm that the sale was an arm’s length transaction between unrelated parties and that you received no goods or services in return for your contribution.
It’s worth noting that some organizations might offer goods or services in exchange for your car donation. Be mindful that the value of these benefits will reduce the amount you can claim as a tax deduction. Donating directly through the American Cancer Society Cars for a Cure program ensures that your contribution is maximized for both the cause and your potential tax benefits, making it a truly impactful decision.
