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IRS Deductions

Understanding Tax Deductions

Beginning January 1, 2005: If a donor itemizes their federal income taxes, they can claim the amount for which the vehicle was sold -- if sold to a third party such as a salvage yard or sold at an auction. Most charities sell donated vehicles at auction so they can quickly turn the vehicle into cash to support their programs.

However, if the vehicle is drivable, roadworthy and delivered to the Center we have the opportunity to sell the vehicle to a current or former guest of the Center. In this case, the donor may claim private-party Fair Market Value for the vehicle rather than the sale amount (commonly called Blue Book Value). The IRS requires that the charity supply the donor with a receipt of the donation with the amount for which the vehicle was sold.

Any new information on donor or charity requirements can be found on the Internal Revenue Service website at http://www.irs.gov

The Center for the Homeless has created vital partnerships with local businesses that allow the Center to accept vehicles in any condition and receive top dollar for donated vehicles, even if the vehicle is salvaged for parts or compacted as scrap. These partners ensure that donated vehicles are picked up in about three days (towing is at no charge to the donor within a 35-mile radius of South Bend) and sold in a timely manner, usually in less than two weeks. And because the Center runs its own program, all proceeds come back to the Center to help people in this community break the cycle of homelessness.