Car Donation and Taxes
Contributions made to the Hands’ Good Neighbor Garage are tax deductible for federal and state purposes. Generally, when you donate your car to a charity, your tax deduction is limited to the gross proceeds from the ultimate sale or disposition by the charity.
However, when you make a donation to the Hands’ Good Neighbor Garage program you may be able to deduct the full fair market of the vehicle.
Current tax law provides that if a charitable organization either makes a substantial improvement to a donated vehicle, or if they offer the vehicle for sale at significantly below-market value to needy individuals, then the donor may deduct the full fair market value of the vehicle. Since Good Neighbor Garage has the capability to make repairs (substantial improvements) to donated vehicles, and we also sell vehicles at substantially below-market value as part of our vehicle placement program, you have the opportunity for a maximum tax deduction.
