Dear Jason – May 2021
I recently donated my car to a charity. Can I deduct the fair market value (FMV) of the car from my taxes in 2021?
If you are itemizing, you can claim the deduction. The question becomes how much can you deduct. If you donated your car to a charity, and the charity sells the car at auction (which many charities do), then the deduction is limited to the price for which the vehicle was sold. If you donate the car to a charity that significantly uses the vehicle or materially improves the vehicle, then the Fair Market Value can be deducted. You need to receive a tax form 1098-C from the charity, if you are claiming above $500 for the value of your donated vehicle.