I donated a used car to a qualified charity that sold the car immediately after I donated it. I would like to take the charitable contribution as an itemized deduction. Do I need to attach a special form to my return for the donation? What records should I keep?

Answer:

Recordkeeping and filing requirements depend on the amount you claim for the deduction.

1) If the deduction you claim for the car is at least $250 but not more than $500, you'll need a contemporaneous written acknowledgment from the charity. You must obtain the acknowledgment by the date you file your return for the donation year or by the return due date with extensions, whichever is earlier. The acknowledgment must include:

  • The name of the charitable organization.
  • The date and location of the charitable contribution.
  • A detailed description of the car.
  • Whether the charity provided you with any goods or services in return for the car and a description and good faith estimate of the value of any goods and services received.
  • If the charity provided solely intangible religious benefits, a statement to that effect.

Don't attach the written acknowledgment to your return. Instead, keep it with your records to substantiate your donation.

2) If the deduction you claim for the car is more than $500, the contemporaneous written acknowledgment from the charity must be timely, must be attached to your return, and must include all of the information listed in (1) above, plus the following additional information:

  • Your name and taxpayer identification number (TIN).
  • The vehicle identification number (VIN).
  • Beyond the above items, what the written acknowledgment must contain depends on what the charity does with the vehicle. If the charity sells the vehicle, the written acknowledgment must contain the date the car was sold by the charity, a certification that the charity sold the car in an arm’s length transaction between unrelated parties, the gross proceeds of the sale, and a statement that your deduction may not exceed the gross proceeds of the sale.

You must generally receive the written acknowledgment within 30 days of the sale of the car or, in certain circumstances, within 30 days of your donation, for the acknowledgment to be considered timely.  The charity may provide you a completed Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, which contains the same information, in lieu of the written statement.

You must also complete Section A of Form 8283, Noncash Charitable Contributions and attach both the written acknowledgment and this form to your return.
 

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