This is property that would result in a capital gain if you were to sell it at its fair market value. Capital gain property includes capital assets held more than one year, such as stocks, bonds, jewelry, coin or stamp collections, cars, and furniture. It also includes real property and depreciable property used in your trade or business.
The general rule is that your charitable deduction for a gift of capital gain property is the fair market value. If the following exceptions apply, you would have to reduce the fair market value by any capital gain you would realize on a sale:
You contribute the property to private non-operating foundations, that do not qualify for the 50% limit (the limit on your contributions as a percentage of adjusted gross income, that applies to most charitable organizations).
You contribute tangible personal property that is put to a different use by the charity.
You choose the 50% limit instead of the 30% limit. (These limits are described below.)
Donation of a Vehicle
If you donate a vehicle, the amount of your deduction depends on what the charitable organization does with the vehicle.
If the charity turns it over to a dealer who auctions off the vehicle, you can only deduct the amount of the proceeds from the auction. By law, the charity has to send you an acknowledgment of this transaction within 30 days.
If the charity makes a "significant intervening use" of the vehicle in its charitable work, or gives it to a beneficiary, or sells it to a needy individual at a price that is significantly below the market price, you can deduct the fair market value.
You should receive a certification from the charitable organization within 30 days. You should keep a record of the car — make, model, year, mileage, and a photo showing its condition, if possible, as support for the amount you are deducting.