Can I deduct a donation of a car I received as a gift?

Question

In 2006 my parents bought me a used car. In 2017 I donated the car to charity and they report it sold for $575.

Can I deduct that $575 from my taxes given that I did not personally pay for the car in the first place?

Answer 1

Yes, you can deduct that as a charitable contribution on your Schedule A if you are itemizing deductions.

The car was a gift from your parents. When you donated the car, you owned it. It doesn’t matter how you obtained it or who originally paid for it. The car was determined to be worth $575 when you donated it (based on the sale), so that is what you can deduct.

Since the deduction is more than $500, you’ll need to file Form 8283. You also need to attach a copy of the 1098-C form you received to your tax return.

IRS Publication 526 has a section detailing the special rules for deducting car donations.