The best method for determining the fair market value (FMV) of your car is to pay for a written appraisal from an independent, qualified appraiser prior to donating the car.
This is required if your vehicle's value is above $5,000.
So since the car you donated is worth more than $5,000 you must get a written appraisal in order to claim the deduction.
You will only be able to claim this deduction if you are itemizing your deductions rather than taking the Standard Deduction. TurboTax will choose which is best for you.
You also must determine how the tax-exempt organization intends to use the car. If it's going to sell the car, the IRS limits your deduction to the sale price, even if it’s below the market value.
If it sells for $500 or less, you can claim a deduction for the lesser of its fair market value or $500. If the organization plans to keep the car, then you can deduct the value you found in the used-car price guide.
If that value is greater than $5,000 and the charity doesn’t sell the car, then the IRS requires you to obtain a written appraisal before claiming a deduction.
IRS rules state that the tax-exempt organization must inform you of the sale amount of your vehicle within 30 days, generally on a Form 1098-C. Regardless of whether it keeps or sells the car, the organization must provide you with a written acknowledgment that serves as your proof of the donation
A Form 8283 will be required to be filed with your tax return. TurboTax will complete Form 8283 for you.
Click here for "How Do I Estimate the Value of My Donated Car for My Tax Deduction?"
Click here for "How Do Tax Deductions Work When Donating a Car?"
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