Purple heart car donation tax deduction

IRS law states that a donor must receive a receipt for the donated vehicle within 30 days of making the donation in order to qualify for a tax deduction. Tax deductions are based on the value of the vehicle and are often more than a donor might receive trading in the vehicle at a dealership. The fair market value of a vehicle can be determined by using the Kelly Blue Book. Donors may deduct up to $500 or the sale price, whichever is greater, on their federal tax return. For vehicles valued at more than $500, taxpayers may deduct the total of what the Purple Heart receives when selling the vehicle. The fair market value of a donated vehicle may not be estimated for more than $500 at the time that the vehicle is donated; however, a taxpayer may deduct the full market value after the charity actually sells the vehicle. The value of a donated vehicle may not exceed the amount that the Purple Heart receives for the vehicle at the time of sale.

Cars are not the only type of purple heart donation vehicles, which can be donated. Other kinds of transportation vehicles may be accepted as well. Some chapters of the Purple Heart may also consider donations of motorcycles, trucks, RVs, aircraft and boats. In some cases, certain farm equipment may be accepted for resale by the charity. People interested in making a donation can go to the organization's website and complete the online donation form, or contact the Purple Heart toll free at (888) 414-4483 (see Resources below).

Vehicles to be donated can be driven to one of the organization's donor centers, or donors can arrange for the vehicle to be picked up. If the vehicle cannot be driven to one of the Purple Heart's donation facilities, a registered towing company that works with the Purple heart will contact you to arrange a date and time for the vehicle to be picked up. At the time of pick up, the towing company provides a donor with a receipt indicating that the vehicle has been picked up on behalf of the Purple Heart. Donors must have the keys and title to the vehicle ready at the time of pick up. The vehicle's title must be clear, and free of all liens. If a vehicle needs to be picked up, the cost of towing may be deducted from the donation. Once a vehicle has been picked up, the Purple Heart will mail the donor a receipt within 10 business days.

The Internal Revenue Service allows a tax deduction for individuals who donate qualified vehicles to qualified charitable organizations. A qualified vehicle is a motor vehicle for use on public streets, roads and highways, an airplane or a boat. The donor should ensure that the benefiting charity is listed with the IRS as a qualified charitable organization listed in Publication 78, Cumulative List of Organizations described in Section 170(c) of the Internal Revenue Code of 1986.


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