What are the IRS rules regarding 2007 donations of cars exceeding $500 in value?
There are some changes in the reporting of charitable donation of car in 2007. Clearly, the IRS is attempting to prevent some exaggerated deductions for vehicles that was presumably occurring in prior years.
The IRS further requires that the taxpayer will "need to obtain and keep evidence of your car donation and be able to substantiate the fair market value of the car." In effect, the taxpayer is required to keep substantial evidence on hand in case of an IRS examination.
The IRS has also required that if the Taxpayer is claiming a deduction of $250 or more for the car donation, the taxpayers will need;
1. A contemporaneous written acknowledgment from the charity that includes a description of the car.
2. A statement of whether the charity provided any goods or services in return for the car.
3. A description and estimate of the fair market value of the goods or services.
There are similar rules in place for the charitable institutions to comply with the above rules and regulations, (1, 2 and 3 above) and so all of the above will be provided to the taxpayer making the vehicle donations.