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Tax Question - Donated car to charity...car was originally gifted to me

Posted on 2/8/17 at 11:08 am
Posted by Green Grass Miracle
Colorado
Member since Jan 2015
119 posts
Posted on 2/8/17 at 11:08 am
In high school, my parents bought me a car and had it registered to me. I kept it until the year after I graduated college. My parents were looking to buy a new car and I was interested in their old car, so they traded me their old car for mine, and then traded in my car to go toward their new car purchase. I hope I haven't lost you...

I kept that same car for several years, doing several repairs to keep it running, and probably invested a few $K over at least a decade. Last year, it finally had a major breakdown that wasn't worth fixing, so I donated it to a local charity, in which it sold for $800 according to their 1098C form that they sent me. I figured that I could write this off on my taxes, but according to Turbotax, since the car "appreciated" to $800 from the $0 that I paid for it, I can't receive any tax break. Is this correct? I spent a lot of money to keep that car running. I could have also sold the car to a parts yard and donated the proceeds from it, and received a tax benefit, no? I don't understand why I can't get a benefit just because of the means to which I donated to charity.
This post was edited on 2/8/17 at 11:09 am
Posted by Zipfer2022
Member since Nov 2011
3755 posts
Posted on 2/8/17 at 11:42 am to
Are you itemizing?
Posted by Green Grass Miracle
Colorado
Member since Jan 2015
119 posts
Posted on 2/8/17 at 11:49 am to
Yes
Posted by Zipfer2022
Member since Nov 2011
3755 posts
Posted on 2/8/17 at 11:56 am to
I think you can deduct it for its FMV $800 on Sch A. You're going to have to fill out form 8283. Read the instructions for that form should be all you need.
Posted by makersmark1
earth
Member since Oct 2011
20415 posts
Posted on 2/8/17 at 5:18 pm to
It should be an $800 deduction.
Posted by Mouthulcer
Metairie
Member since Feb 2015
639 posts
Posted on 2/8/17 at 8:42 pm to
Your parents can gift you $28,000 a year tax free. You get fmv basis for the gift. If it's fmv is worth more than $800 then you should be able to deduct something if you itemize. Your deduction should be $800 since your fmv should equal basis therefore no gain on the "sale".
This post was edited on 2/8/17 at 8:44 pm
Posted by Green Grass Miracle
Colorado
Member since Jan 2015
119 posts
Posted on 2/9/17 at 10:31 am to
Thanks. Turbotax needs some improvement in this section. The FMV was easily over $800 when I got it...probably at least $8K to be honest as it was in good condition. I know I've invested at least $1K into it, so I just put $1k as the purchase price in turbotax, and it gave me the full deduction, which added about $200 to my refund.

Thanks for the advice everyone!
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