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I donated a car to the local high school automotive department. The Blue Book value was around $5500. I did not get an appraisal and I have already submitted by return.

I did receive a letter from the school with their tax exemption number and that the car will give the students working experience and help with funding for the program.  Not sure what to do at this point.  Any suggestions would be appreciated
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3 Replies

I donated a car to the local high school automotive department. The Blue Book value was around $5500. I did not get an appraisal and I have already submitted by return.

Blue book is an acceptable valuation.

This, from IRS Publication 561, Determining the Value of Donated Property:

If you donate a car, a boat, or an aircraft to a charitable organization, its FMV must be determined.

Certain commercial firms and trade organizations publish monthly or seasonal guides for different regions of the country, containing complete dealer sale prices or dealer average prices for recent model years. Prices are reported for each make, model, and year. These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. The prices are not "official," and these publications are not considered an appraisal of any specific donated property. But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area.

These publications are sometimes available from public libraries or at a bank, credit union, or finance company. You can also find pricing information about used cars on the Internet.

An acceptable measure of the FMV of a donated car, boat, or airplane is an amount not in excess of the price listed in a used vehicle pricing guide for a private party sale, not the dealer retail value, of a similar vehicle. However, the FMV may be less than that amount if the vehicle has engine trouble, body damage, high mileage, or any type of excessive wear. The FMV of a donated vehicle is the same as the price listed in a used vehicle pricing guide for a private party sale only if the guide lists a sales price for a vehicle that is the same make, model, and year, sold in the same area, in the same condition, with the same or similar options or accessories, and with the same or similar warranties as the donated vehicle. 

I donated a car to the local high school automotive department. The Blue Book value was around $5500. I did not get an appraisal and I have already submitted by return.

1.  For vehicle donation what method do I select in the TurboTax drop down for "method used to determine value" if I used Kelly Blue Book? "Comparative sales" or "Present value" or what?

 

2.  And on Form 1098-C box 5.c is checked "Donee certifies that vehicle will not be transferred for money, other property, or services before completion of material improvements or significant intervening use."

Form 1098-C box 4c (gross proceeds from sale) is blank because they didn't immediately sell it. In TurboTax I entered a Blue Book value from the range.

 

Furthermore I don't know if the school sold it. 

 

Yet TurboTax tells me:

"Your Entered Value Is Different
You told us the value of this donation was zero but the Form 1098-C or other statement value was zero
We will change your entered value to match the Form 1098-C amount unless you qualify for one of tine
exceptions below.
- The charity made a significant use of the vehicle before they sold it
- The charity made a material improvement to the vehicle before they sold it
- The charity gave or sold the vehicle at a reduced price to a needy individual.

- None of the above"

 

So how do I complete the TurobTax steps for this donation and to get a valid value greater than the $0 zero dollars it gives me if I answered "None of the above" or do I say "The charity made a significant use of the vehicle before they sold it" or "made a material improvement " even if I didn't report to me they sold it?

PattiF
Expert Alumni

I donated a car to the local high school automotive department. The Blue Book value was around $5500. I did not get an appraisal and I have already submitted by return.

You can use Present value or FMV as the method used to determine value if the amount is $500 or less.

 

But, if the FMV of your donated car exceeds $500, you can only deduct the amount the charity received (or expects to receive) when sold at auction, in most cases.

 

For example, if your old Subaru hatchback had a FMV of $950 at the time of donation and the charity later sold it for $680, you can only deduct $680.

 

Charities must give you Form 1098-C with the allowed donation amount within 30 days of the donation or sale if this is more than $500. You'll need to send a copy of Form 1098-C along with some other paperwork to the IRS (we'll walk you through this process in TurboTax).

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