Tax Q&A;: Auto Donation

Q: If I donated my automobile to charity, do I get to take the full amount of the donation off my tax bill? For example, if the car is worth $3,000, will the full amount be subtracted from amount of taxes due?

A: No, and you would be smart to be careful about how much you try to deduct.

You are allowed to deduct only the fair market value of your car--in other words, what you could sell it for on the open market. Charities sometimes give the mistaken impression that you can take the top “blue book” value for any vehicle donated, but few cars actually would sell for that much.

Assuming your car does have a fair market value of $3,000, then when you donate it to charity, you get an income tax deduction--not a credit--for that amount. Thus if your federal income tax bracket is 31%, your federal tax will decrease by $930 (31% X $3,000) and your state tax will decrease by $279 (9.3% x $3,000).

--MARVIN FREEDMAN, CPA

Freedman, Broder & Co.

Santa Monica

For more information on taxes and to see other questions and answers in this series, go to The Times’ Web site at https://ww.latimes.com/taxes. To find a CPA, visit the California Society of CPAs at https://www.calcpa.org.