How much can I deduct for donating a car?
The maximum you can deduct is the fair market value (FMV) of your car. Generally, that's the price a willing buyer would pay a willing seller, assuming neither party is being forced to buy/sell and both parties have reasonable knowledge about the condition of the vehicle.
Now here's where it gets a little tricky. If the FMV is $500 or less, claim the FMV. 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. 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).
How do I determine the FMV of my car?
The most accurate method is to look for private party ads for similar vehicles for sale in your area. If you can't find sales ads for similar vehicles, you can use industry pricing guides like Edmunds or Kelley Blue Book.