Question

sabella donated a car to a qualified charitable organization. She purchased the car in 2016 for $29,400. The fair market value of the car when she donated it was $4,100. The charitable organization immediately sold the car for $2,500. They did not significantly use or make any improvements to it. It was not sold at a reduced price for a needy individual. The organization provided Terry with a Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes. How much can Terry deduct as a charitable contribution on her Schedule A (Form 1040), Itemized Deductions?
$1,600
$2,500
$4,100
$29,400

Answer 1

$2,500

Because the charity immediately sold the car without significant use or material improvement (and it wasn't sold at a reduced price for a needy person), the deductible amount is limited to the charity's gross proceeds from the sale (the amount reported on Form 1098‑C).