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Cassandra
Cassandra, Tax Preparer
Category: Tax
Satisfied Customers: 306
Experience:  8yrs experience in taxation for individuals. CTEC Registered and an Authorized E-filer with the IRS
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I am considering donating my old car that has a Kelly Blue

Resolved Question:

I am considering donating my old car that has a Kelly Blue Book value of about $6,000 due to the potential of having an additional tax deduction. Since I have had to pay AMT for the last 5 years, I am wondering if donating my car would really help my tax situation or if I would just end up paying more AMT. So the question is...for someone in a high tax bracket that does not have much in tax deductions (single, low mortage payments etc.) would donating a car help me to pay less in taxes?
Submitted: 5 years ago.
Category: Tax
Expert:  Cassandra replied 5 years ago.
HelloCustomerand welcome to just answer.

If you donate your care you do not actually get Kelly Blue Book Value for the tax deduction. The Place that you donate it too will sell the car and then what they sell it for is what you would be able to take as a deduction. So if the place you donate it to sales it for $3500 then that would be the donation deduction you would be able to take. To figure out what amount you would save on your taxes would be dependent on your tax bracket. If you were in the 28% tax bracket then you would save 980 in taxes owed. This will not cause you to pay more AMT.

Now, this would only be beneficial if you run a schedule A, Itemize your deductions. If you do not, then you would not have any tax savings for the donation of your car, unless you had enough itemized deductions that would be worth more than your standard deduction for the year.

Cassandra, Tax Preparer
Category: Tax
Satisfied Customers: 306
Experience: 8yrs experience in taxation for individuals. CTEC Registered and an Authorized E-filer with the IRS
Cassandra and 6 other Tax Specialists are ready to help you

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