Beginning in 2005, the charitable contribution deduction for a vehicle donated to charity is generally limited to the gross proceeds from its sale.  This rule applies if the claimed value of the donated vehicle is more than $500.

Form 1098-C (or other form of written acknowledgment of the donation) from the organization must be attached to the taxpayer’s return.  Among other things, the acknowledgment generally must include the gross proceeds of the sale, the vehicle identification number, and a statement certifying the vehicle was sold in an arm’s length transaction between unrelated parties.  This acknowledgment must be provided within 30 days after the date of the sale of the vehicle (or by October 1, 2005, whichever is later).