Anyone has any past experience in donating a car. Since I now have my Prime, I would like to donate the car. It is a pretty old car 99 Mazda 626 LX (162k miles), although it is in running condition. After reading IRS website, it looks like that I can only claim a max of $500. But if the car is donated to a charity, which gives this car to a family then I can claim a max of upto $5000 depending on the Blue Book value. If the charity ends up auctioning the car, then I can only claim upto $500. If you have a past experience, then please do share your experience. I need to get this done, before the snow starts.
Yeah, it's called a trade in. Sorry couldn't resist. I can say be careful how much you claim as this will increase your audit chances. Document everything out the wazoo in case you are challenged later.
Also consider, while donating, that you would lower tax liability which can also lower your federal tax credit for buying the Prime. If it won't lower your tax liability below $4502, then there isn't an issue or if you choose to claim the tax credit for buying the Prime. #1 in Easley,SC
I've donated a couple of cars to charities for the tax deduction. The charity will send you a letter with the price sold at the auction. The IRS explains the process in the attached pdf...
