If you have an auto, boat, or airplane that you no longer want and choose to donate it to a charity, be sure to follow these guidelines.

The charity needs to provide you with either a 1098-C [see a copy here] or a written contemporaneous acknowledgment of the contribution which states:

• The donor
• The taxpayers social security number
• The charities federal ID number
• The vehicle ID number
• A description of the vehicle
• A good faith estimate of the value of any goods or services provided by the charity in exchange for the vehicle, or if none then a statement that only intangible religious benefits were received.
• If the charity sells the vehicle, the sale must be at arm’s length, and the sales price must be listed. Your donation will be limited to the amount of sales proceeds unless it is was sold at a discount to further the purpose of the charity.
  
• If the charity keeps the vehicle for use, the letter must state the use and time frame the charity will use the vehicle and that the vehicle will not be transferred before the use is completed. Your donation will be the fair market value.

If the donation is greater than $5000, you will need to have a qualified appraisal done on the vehicle. This appraisal will be attached to your return when you claim the donation.

Keep in mind that donated vehicles are an area that the IRS has cracked down on because of abuse, and that claiming this deduction will increase your chance of being audited. This shouldn’t discourage you from taking the deduction, but just encourage you to make sure you do everything by the books.