Vehicle Donation Tax Deduction Guide — What Maryland Donors Need to Know
Donating your car, truck, or other vehicle to A Good Shepherd, Inc. in Maryland may entitle you to a federal income tax deduction. This guide explains how the IRS determines your deduction amount, what documentation you will receive, and what to expect when you file.
We are a 501(c)(3) nonprofit organization (EIN on file). All vehicle donations are tax-deductible to the extent permitted by law.
What Documentation Will You Receive?
Within 30 days of your donation, A Good Shepherd, Inc. will provide:
- A written acknowledgment letter confirming your donation, the date, and a description of the vehicle
- The vehicle's condition at the time of transfer
- A statement of whether any goods or services were provided in exchange for the donation (none are)
For vehicles valued over $500, you will also need to complete IRS Form 8283 (Section A) and attach it to your tax return. For vehicles valued over $5,000, a qualified appraisal is required.
How to Estimate Your Vehicle's Fair Market Value
The IRS defines fair market value as the price a willing buyer would pay a willing seller, with neither under pressure to complete the transaction. For vehicles, reliable reference sources include:
- Kelley Blue Book (kbb.com) — private party value in the vehicle's current condition
- NADA Guides (nadaguides.com)
- Recent comparable sales of similar vehicles in your local area
Use the 'private party' value, not the dealer retail price. Condition must reflect the actual state of the vehicle at the time of donation.
The Two IRS Rules That Determine Your Deduction
Under IRS Publication 526 and Section 170(e)(3), the deduction for a donated vehicle depends on how the receiving nonprofit uses or disposes of the vehicle:
If the nonprofit sells your donated vehicle, your deduction is limited to the gross proceeds of the sale — not the fair market value of the car at the time of donation. The charity must send you IRS Form 1098-C (or a written acknowledgment with equivalent information) within 30 days of the sale.
If the nonprofit uses the vehicle directly in furtherance of its charitable purpose — including giving it to a qualifying individual — you may be able to deduct the vehicle's fair market value at the time of donation, provided certain conditions are met.
A Good Shepherd, Inc. places donated vehicles directly with low-income families in Montgomery County at no cost to recipients. This is a key distinction from organizations that sell vehicles at auction. Consult your tax advisor to determine which rule applies to your specific donation and situation.
Quick Reference — Deduction by Donation Value
| Under $250 | None (keep own records) | Fair market value |
| $250 – $500 | Written acknowledgment from charity | Fair market value |
| $500 – $5,000 | IRS Form 8283 (Section A) | Gross proceeds or FMV (see above) |
| Over $5,000 | Form 8283 (Section B) + qualified appraisal | Appraised value |
Important: This guide is for general informational purposes only and does not constitute tax advice. Consult a qualified tax professional for guidance specific to your situation.
Ready to Donate and Claim Your Deduction?
Call us at (301) 355-9333 or complete our online form. We serve all of Montgomery County, MD. Free pickup, IRS-compliant documentation, and your car goes directly to a local family in need.