Americans used to be able to claim fair market value on most any donated vehicle. Not so anymore. In 2004, Congress passed the American Jobs Creation Act. It contained vast changes for valuing vehicle donations. As a result, the IRS has a tougher policy for accepting vehicle donations as tax deductions. The tax deduction for donated vehicles worth more than $500 cannot top the gross proceeds the charity receives selling the vehicle. The taxpayer also needs written acknowledgment of the donation from the charity and must attach a copy to his or her tax return.


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