However, if the charity sells the car at a significant discount to a needy individual, or keeps the car for its own use, then you can claim a deduction for its fair market value. For example, if the charity sells the car at auction for $3,000, your deduction is limited to $3,000, even if the fair market value is $4,500. Use the price the charity sells your car for as the amount of your deduction. Step 1: Find out how much the charity sold the car for Here are 4 simple steps and tips to help you understand and claim a tax deduction for your donated car on your tax return. In most other cases, you can use the car's fair market value.Deductions for cars the charity sells are limited to the sales price.The Internal Revenue Service (IRS) requires you to calculate your tax deduction in one of two ways, depending on how the charity uses your donation:
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