From time-to-time, nonprofit organizations may be donated a vehicle, boat, or airplane as a charitable contribution. The IRS realized that this was an area in which taxpayers were abusing the law, often taking a deduction far in excess of the actual value of the vehicle being donated. For example, in one instance a vehicle was ready for the junk pile but the donor gave it to a charitable organization. Based on the Kelley Blue Book Value it had a fair market value of $1,200, which the donor used as a charitable contribution deduction on his Form 1040. So several years ago, more restrictive rules were put in place in regard to the amount that may be deducted as a charitable contribution.
The long-standing rule for non-cash charitable contributions states that any such contribution valued in excess of $500 must be reported on Form 8283 and included Read more