Donating a used automobile or boat to charity benefits a good cause while providing a tax deduction. Care must be exercised, however, in order to avoid an IRS challenge to the donation.
When property is contributed to a qualified organization, the amount of the charitable contribution is the property’s fair market value - or the price that a willing buyer would pay a willing seller - on the contribution date. There are commercial guides avail-able, commonly called "blue books," which provide estimated automobile values based on dealer aver-age prices. These prices are not "official" and are not considered to be qualified appraisals. "Blue book" values must be adjusted to reflect the actual condition of the automobile. For example, if an automobile needs extensive repairs, the estimated cost of those repairs must be deducted from the "blue book" value to arrive at the true fair market value of the charitable contribution. If the value of the automobile is greater than $5,000,
