Is my car donation still tax deductible if it has no fair market value due to the car s poor condition?
My car (a 1993 Ford Taurus station wagon) was declared as junk late last year after its front cross-member frame rotted away and that part can't be replaced. Because of that, the car is hopeless and can't be driven. I checked Kelly Blue Book s website and it stated there's no value in that car in poor condition. I donated the car to Kars4Kids and have the official receipt. Is this car donation still tax deductible, and I can declare a value, or do I just do my federal and state taxes and leave out this donation?
The receipt would show the "value". Generally if it doesn't run, its worth the price of scrap metal and an older vehicle can bring in $100 or more in junk metal value.
If you take more than the $75 to $100 scrap metal value of it you may have an IRS auditor knocking on your door.
If it were me, I'd take about $100. If you declare something higher, you won't get audited for that alone but if you are audited for something else, the auditor could easily ask you about the car too. I'm guessing you would have a hard time rationalizing a larger amount. So, if the auditor finds that you cheated on the car, he's going to be extra attentive to other claims on your tax forms. It's not worth the risk, in my opinion.
You can only deduct what they were able to sell the car for and would have to have a letter from them stating the value. It may be a moot point anyway since you'd have to be able to itemize deductions in order to claim it.
Just the piece of paper showing that you donated the car is not enough. They must give you a receipt that shows the amount of money they actually received for the car if they sold it, even if they sold it for scrap value, which is probably what they did. Get that from the charity and you can take the deduction.
But unless you have more in itemized deductions than the standard deduction you are allowed, which is almost double what it was in 2017, it is useless to you.
It is worth about $200 as salvage.
If the receipt that states a value, then you can deduct either that value or $500, whichever is less.
If the receipt does not state a value, then you can't make up a value to declare; you leave out this donation.
If it has no value, then there's nothing to deduct. With the new standard deduction, you'd likely get nothing out of it anyway.
With the new tax laws, very few people will benefit from itemizing deductions. If you do not itemize then the deduction is worthless. If you do itemize, then call your local junkyard to see what they're paying for scrap cars. Usually they pay per ton, somewhere around $100-$300 depending on current prices for scrap metal.
A quick google search found that the curb weight of a 1993 Taurus was just over 3,000 lbs, so your deduction is 1.5x the per-ton rate at your lock junkyard.
You can claim $500, you don't need to prove any donation $500 or under (I just donated a car and got a letter from the company I donated to stating such
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