Because of a recent change in the tax code, people donating a car to charity will not be able to claim as much on their income tax returns as in previous years.
On Oct. 22, 2004, President Bush signed a bill that said a person donating a car to charity can only value the car at what the charity is able to sell it for at auction. Previously the car was valued at what it would sell for privately.
The big change is that you can no longer deduct the (Kelly's) Blue Book value
but only what the charity organization sells (the car) for said Sally Zalek, a tax preparer for H&R Block, 86 N. Court St. Kelly's Blue Book is a reference guide for the fair market value of vehicles.
At the Columbus Volunteers of America, car donations have been cut in half since the tax code changed. There is a considerable difference between the price donators could previously write off and what they can now, said Cindy Miller, director of auto donations and sales for the Columbus Volunteers of America.
Fair market value was based on what a car would sell for in its current condition and often people took that from Kelly's Blue Book
she said. We're not aware of what they (donors) claimed. We had no part of that.
The change in the tax code and resulting decrease in donations has limited the money the Volunteers of America have at their disposal Miller said.
People used to be able to give a car to charity whether it was running or not
Zalek said. I think they (the government) believed people were taking advantage of the law.
Zalek said she didn't know how often people inflated the value of their donation, but she knows it happened.
Donors must now obtain a certificate from the charity organization stating what they were able to sell the car for to include in their tax forms.
An individual can still claim the fair market value of a car if the car is worth less than $500, if the charity keeps the car for its own use or if the charity resells the car to a low-income individual at a reduced price.
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