– A new tax law going into effect January 1, states that taxpayers will no longer be able to write-off a donated vehicle´s fair market value but rather the vehicle´s actual sale price at wholesale auction, which is significantly less than fair market value, reported Kelley Blue Book on November 24.
The reason for the change is that the government believes too many taxpayers have taken advantage of the system, overvaluing donated property, specifically vehicles.
To garner the highest deduction for a donated vehicle, consumers should consider donating their vehicle by the end of the year, before the law changes. Before donating a vehicle, Kelley Blue Book has issued the following suggestions:
Donate your vehicle before Dec. 31.
Determine the fair market value of your vehicle.
Make sure the charity is a name you recognize and trust.
Ask how much money the charity receives.
Sign the title directly to the charity or agent.
Get a receipt.