Auto donation worth more than $5000 - requirements for tax extension filing

[RReuben]

Hi,

I donated an automobile to a tax exempt charitable institution in October 2022 but did not get an appraisal, not realizing that one is necessary when donating vehicles worth more than $5000. The vehicle was not sold, and is currently being used by the organization for day-day operations. My questions:

- is it too late now to get a back-dated appraisal? Does the appraisal have to be done before the vehicle is donated?

- can I take a deduction for a round $5000 (or does it have to be at most $4999) with just a donation confirmation receipt from the charitable institution? 

- given my estimate of the market value of the vehicle (based on similar condition vehicles advertised in the used-car market towards the end of 2022) to be between $7000 - $7500, is there any other means in the tax code to claim the remaining $2000 - $2500 I am possibly leaving behind (ie. assuming I cannot get a formal appraisal at this point and can only go with the $5000 limit with a donation receipt)

Thanks.

[MelodyB]

Hi RReuben!

Here is everything you need to know when donating a vehicle;

https://turbotax.intuit.com/tax-tips/charitable-contributions/how-do-tax-deductions-work-when-donati...

I hope this helps!

MelodyB

[Terri Lynn]

Hello RRueben, 

First off, I just want to say I am sure most people are unaware of the appraisal requirement, afterall,  it is not like   donations of property  worth  over $5,000 is common place, (you must be an amazing person!)

As you mentioned in your question, If the value of the donated property exceeds $5,000, the donor must get a qualified appraisal for contributions of property (other than money or publicly traded securities). The donee organization can not just provide the value and can not be a qualified appraiser for the purpose of valuing the donated property.

• Q1: "The vehicle was not sold, and is currently being used by the organization for day-day operations". 
• A1.:  In general,your deduction for a donated car, boat, or airplane is generally limited to the gross proceeds from its sale by the qualified organization. This rule applies if the claimed value of the donated vehicle is more than $500. 
• Q2: "is it too late now to get a back-dated appraisal? Does the appraisal have to be done before the vehicle is donated?"
• A2:. For an appraisal report dated on or after the date of the contribution, the valuation effective date must be the date of the contribution, and for informational purposes, for future reference, an appraisal report dated before the date of the contribution, the valuation effective date must be no earlier than 60 days before the date of the contribution and no later than the date of the contribution.
• Q3: "can I take a deduction for a round $5000 (or does it have to be at most $4999) with just a donation confirmation receipt from the charitable institution? "
• A3:Unfortunately, the vehicle would have needed to be sold by the organization first, ( as explained in A1), and they would need to provide you with the sales price. 
• Q4: "- given my estimate of the market value of the vehicle (based on similar condition vehicles advertised in the used-car market towards the end of 2022) to be between $7000 - $7500, is there any other means in the tax code to claim the remaining $2000 - $2500 I am possibly leaving behind (ie. assuming I cannot get a formal appraisal at this point and can only go with the $5000 limit with a donation receipt)"
• A4: No, unfortunately there is no regulatiom for you to claim this difference under the current tax regulations,  as this would have been expected to have been handed in the required appraisal process.

For additional information regatrding contributions please click on the following links:

• Form 1098C Contributions of Vehicles, Boats and Planes 
• Valuating My Donated Car for my Taxes 
• Donatimg a Car 
• Charitable Organizations and Substantiating Noncash Contribitions  
• Can I Deduct More Donations? 

Hopefully this helps!

Best Wishes,

Terri 

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