Blue book is an acceptable valuation.
This, from IRS Publication 561, Determining the Value of Donated Property:
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
- 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?
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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