Question: Can I deduct the fair market value when I donate my car to charity? I want to donate my 1996 Plymouth Grand Voyager with 100,000 miles and it's in pretty good shape -- why can't I get the fair market value deduction on it? Answer: The IRS is still making decisions on some of the provisions associated with the new tax legislation that came into effect on January 1st, 2005. But the law now states that you can only deduct up to $500 for a donated car or the sale value of the vehicle if it sells for more than $500. There are only two exceptions to this rule: 1) If the charity you donate your car to will use the vehicle for their charitable purpose you could claim a deduction for the full fair market value. or 2) If the charity makes significant repairs before selling the vehicle. Again you could claim the full fair market value.