Under the new law, allowable deductions for charitable contribtutions of vehicles for which the claimed value is over $500 will depend on how the vehicle is used by the recipient charity. If the chairty sells the vehicle without any significant intervening use or material improvement, the donors deduction is limited to the gross sales proceeds received by the charity. If the charity uses the asset in direct furtherance of its charitable purpose the donor may deduct the “Fair Market Value” of the vehicle. Example: If a vehicle with a “Fair Market Value” of $3,000 is donated to a charity and they sell the vehicle for $1,500, the donor can only deduct $1,500. If the charity provides the vehicle to a disadvantaged person, the donor may deduct the “Fair Market Value” of $3,000.