Using a FMV when You Donate Car Assets
FMV is something a lot of people tend to be confused about. Firstly, FMV stands for fair market value. It is not and has never been synonymous to the most favorable market value. The key word here is ‘fair’ after all. When you donate car assets, you are not always allowed to make use of the fair market value for your vehicle.
If, for example, you have chosen to “sell” your car to an impoverished individual for a ridiculously low rate, then that will make you immediately eligible to use the FMV. You have to make sure, however, that you can provide proof to the IRS regarding the low-income status of the buyer.
If you have donated a car that is valued at less than $500, then the government also gives you the right to use the FMV instead. Even if it means that the government will not earn so much from your transaction, the government is appreciative of the fact that you had the very best intentions for making such a donation.
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