Donated Car -Deducted First $500, Deduct Rest Later?

[zeros]

Had client hand me a paper stating that client could deduct the first $500 and the balance when the car was sold. First time I ever heard of that. Is this new?

[David1980]

Not really new. I think 2005? I haven't seen them suggesting $500 be deducted before the sale happens before but that could have been done before. Probably they just got tired of donor's calling all the time to find out if they can claim the deduction yet during tax season.

If you donate a vehicle, you can't claim a deduction more than $500 unless you have the 1098-c (or equivalent). http://www.irs.gov/publications/p526...link1000229709

For example, taxpayer donates a vehicle worth $2,000 December 2013 and it sits for a year before the charity sells it. They can't deduct $2,000 because they don't have the 1098-c. They could deduct $500 since they only need the 1098-c for a deduction greater than $500.

What used to happen with this vehicle donations in the old days is people would donate a trashed junker and then deduct KBB value for something in good condition even though the charity was lucky to get a few hundred $. Deductions inflated enough that we ended up with the 1098-c requirement to limit the deduction to what the charity actually sells the car for.

[taxea]

vehicle donations require a printed document from the charity that states the amount of the donation. Nothing is declared without this.

[Burke]

I think the TP provided that. Only it was for $500, the max without a 1098-C. I had one of those two years ago. The car was donated in December, got a letter immediately from DAV showing $500. No further word that they ever sold it.