A charity must make available for public inspection its application for tax exemption, its determination letter, and its most recent annual information returns (Forms 990). A charity also must provide copies of these documents upon request (unless it makes the documents widely available). A charity may not charge you for inspecting the documents, but it may charge a reasonable fee for copying and mailing the documents.


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When donating a custom or collector car, the car donation tax law remains the same as far as the IRS is concerned: a donor may deduct up to the fair market value of the vehicle when the vehicle is kept and used by the charity. In the case of a collector's item, rather than a standard vehicle, fair market value may be somewhat harder to determine. Nevertheless, you need to ascertain the fair market value for the car, rather than just deducting the money you've put into it. The IRS defines fair market value as "...the price a willing buyer would pay and a willing seller would accept for the car, when neither party is compelled to buy or sell, and both parties have reasonable knowledge of the relevant facts." Obviously, the market for collector's cars is smaller than for regular cars. There is a certain segment of the population that understands and appreciates the value of a car like yours, and might be willing to pay you what you think its worth. But others would not. So you need some legitimate way to document how you came up with the figure; it may make sense to use an appraiser. In any event, if you think the car is worth more than $5000, and want to take that amount or more as a deduction, a professional appraisal is needed. The appraiser has to sign off on your Form 8283, which is the form you submit with your tax return when you donate a car.


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If you donate a car to a qualified charity that will keep and use the car, the value of your charitable contribution is usually the fair market value of the car at the time of the donation. Fair market value is the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts.


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Your tax consultant may assist you in deciding how to value your car donation, but you - the donor - and not the recipient charity, are required by the IRS to be the sole party responsible for determining what the IRS calls the "fair market value" of your car donation, taking into full consideration its condition at the time of donation. Most vehicle donation programs or a good car donation charity will assist you with this. When making car donations for charity, it is very important point to be accurate and fair in assigning a value to your vehicle; do not inflate the value you claim as a tax deduction.


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