In the past, people were often hestitant because of the ambiguity of the vehicle valuation process. What was "fair market value", could you use "Blue Book", the answers were not straightforward and individuals risked having their tax deduction disallowed or reduced by the IRS. With the current tax law this confusion is eliminated. Under the current tax law if your car sells for more than $500, typically at an auction with many potential bidders, your tax deduction will be equal to the gross sales price received at the auction. The gross sales price is the highest bid received before any deductions for auction or other expenses. For cars which sell for over $500 you will receive a letter from NWCDS which includes all the information required by the IRS; including sale price, your name, address, charity name, address, tax id #, the car description with VIN # and the donation and sale dates for the vehicle. Include a copy of this letter with your tax return and you're all set.

If the car you donate is sold for $500 or less the current IRS tax law stipulates that you can deduct the fair market value of the vehicle up to a maximum of $500. The vast majority of vehicles donated have a fair market value in excess of $500. To research the fair market value of your vehicle visit the Kelley Blue Book website. The IRS stipulates that you must use the "private party" valuation option. The informaton you will receive upon pickup for vehicles which sell for $500 or less will indicate that your car sold for $500 or less and include all the information required by the IRS; your name, address, charity name, address, tax id #, and the car description with VIN #. Also included is the donation date and sale date for the vehicle.

For more information, refer to the IRS publication A Donors Guide to Car Donations as it details the regulations for all situations, or ask your tax professional.

Please note that all vehicles donated through Northwest Charity Donation Service are sold for the charities and thus the donor will receive either the sold for "over $500" letter or will have already received the for "$500 or less" letter detailed above. DONATE NOW!