Vehicle donated but never sold by charity

[AZ-Tax]

TP has a letter from charity that TP donated vehicle and charity is to mail TP form 1098-C when vehicle sells if over $500. Should this even be claimed on 2014?

[Bob McCoy]

Talks about exceptions, but may not apply to your client.

http://www.irs.gov/pub/irs-pdf/p4303.pdf

[FEDUKE404]

2014 deduction

My read would be there IS a 2014 charitable deduction for the car. . .but the amount is still unknown.

Without a Form 1098-C the "best" FMV the client could assign is $500.

The IRS pamphlet provided by Bob McCoy explains that issue. There are a couple of end runs where the organization uses the vehicle for its own purposes and a few other off-the-wall type things, but I've never encountered such.

It has been my experience that many people who donate "fine" used cars may eventually receive a Form 1098-C showing only a couple of hundred dollars as the auction price. They then just grin and bear it, say the car was obviously worth at least $500, and move on.

Unless your client has great faith that a Form 1098-C with a large number is soon forthcoming, it may be best just to make the best of what is now available.

FE

[BOB W]

Re read this section in FEDFUKE404 pub post...........Exceptions to Gross Proceeds Limit — Generally, if one of the following applies, you may be eligible to deduct your vehicle’s fair market value on the date you donated it.

Get a letter that it is being used by the charity in their operation. What they sell it for in the future will not be your problem.You get to deduct current Book Value.

[FEDUKE404]

OP made no mention of exception issues

Re read this section in FEDFUKE404 pub post...........Exceptions to Gross Proceeds Limit — Generally, if one of the following applies, you may be eligible to deduct your vehicle’s fair market value on the date you donated it.

Get a letter that it is being used by the charity in their operation. What they sell it for in the future will not be your problem.You get to deduct current Book Value.

I am fully aware of the exceptions, but in the original post by AZ-tax it was stated that "charity is to mail TP form 1098-C when vehicle sells if over $500."

If the charity uses the vehicle for its own qualifying purposes, they would have to fill out Form 1098-C with an entry in Box 5 and provide it to the donor for attachment to his tax return. (Even our old friend Form 8453 has a box to check when you provide that form or "equivalent contemporaneous written acknowledgement" for a return that was efiled.)

Those are the rules for your aforementioned exception, IF it even applies to the question asked by AZ-tax.

It is highly likely a Form 8283 would have to be filed with the 2014 tax return. The IRS rules are pretty clear as to what is needed for a valid vehicle donation of >$500, to include attaching a copy of Form 1098-C .

There is no way I would deduct "market value on the date you donated it" without more bows in my quiver than a mere Blue Book value.

FE

[taxea]

this is why I recommend that my clients sell themselves...most charities wholesale the vehicle and FMV is very low. DIY and get more for the charity of your choice.