The basic rules
- You must itemize deductions to claim it
- If the charity sells your car for more than $500, you generally deduct the sale price
- If it sells for $500 or less, you can usually deduct fair market value up to $500
- If the charity gives the car to a person in need or uses it in its work, you may deduct full fair market value
- Over $5,000 claimed, a qualified appraisal is generally required
Why donating to a program that gives cars away can matter
When a charity gives your car to a family in need — as our program does — you may be able to deduct the car's fair market value instead of a lower auction price.
Paperwork
- Form 1098-C (or written acknowledgment) from the charity within 30 days
- IRS Form 8283 if your deduction is over $500
- Keep records of the car's condition and value
General information only, not tax advice. See IRS Publication 4303 or ask a tax professional.
Frequently asked questions
What is the "$3,000 rule" for cars?
There is no IRS "$3,000 rule" for car donations. The key thresholds are $500 and $5,000.
Can I deduct the Kelley Blue Book value?
Only in certain cases — for example, if the charity gives the car to a person in need. Otherwise the deduction is usually the sale price.