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Exception 1—Vehicle used or improved by organization. If the qualified organization makes a significant intervening use of, or mate- rial improvement to, the vehicle before transfer- ring it, you can generally deduct the vehicle's fair market value at the time of the contribution. But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deducti- ble amount, as described under Giving Property That Has Increased in Value, later. The Form 1098-C (or other statement) will show whether this exception applies. Exception 2—Vehicle given or sold to needy individual. If the qualified organization will give the vehicle, or sell it for a price well be- low fair market value, to a needy individual to further the organization's charitable purpose, you can generally deduct the vehicle's fair mar- ket value at the time of the contribution. But if the vehicle's fair market value was more than your cost or other basis, you may have to re- duce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value, later. The Form 1098-C (or other statement) will show whether this exception applies. This exception doesn't apply if the organiza- tion sells the vehicle at auction. In that case, you can't deduct the vehicle's fair market value. Example. Anita donates a used car to a qualified organization. She bought it 3 years ago for $9,000. A used car guide shows the fair market value for this type of car is $6,000. How- ever, Anita gets a Form 1098-C from the organi- zation showing the car was sold for $2,900. Nei- ther Exception 1 nor Exception 2 applies. If Anita itemizes her deductions, she can deduct $2,900 for her donation. She must attach Form 1098-C and Form 8283, Noncash Charitable Contributions, to her return. Deduction $500 or less. If the qualified or- ganization sells the vehicle for $500 or less and Exceptions 1 and 2 don't apply, you can deduct the smaller of: • $500, or • The vehicle's fair market value on the date of the contribution. But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Prop- erty That Has Increased in Value, later. If the vehicle's fair market value is at least $250 but not more than $500, you must have a written statement from the qualified organiza- tion acknowledging your donation. The state- ment must contain the information and meet the tests for an acknowledgment described under Deductions of at Least $250 but Not More Than $500 under Substantiation Requirements, later. Fair market value. To determine a vehicle's fair market value, use the rules described under Determining Fair Market Value, later. Donations of inventory. The vehicle donation rules just described don't apply to donations of inventory. For example, these rules don't apply if you are a car dealer who donates a car you had been holding for sale to customers. See In- ventory, later. Taxidermy Property If you donate taxidermy property to a qualified organization, your deduction is limited to your basis in the property or its fair market value, whichever is less. This applies if you prepared, stuffed, or mounted the property or paid or in- curred the cost of preparing, stuffing, or mount- ing the property. Your basis for this purpose includes only the cost of preparing, stuffing, and mounting the property. Your basis doesn't include transporta- tion or travel costs. It also doesn't include the di- rect or indirect costs for hunting or killing an ani- mal, such as equipment costs. In addition, it doesn't include the value of your time. Taxidermy property means any work of art that: • Is the reproduction or preservation of an animal, in whole or in part; • Is prepared, stuffed, or mounted to recre- ate one or more characteristics of the ani- mal; and • Contains a part of the body of the dead an- imal. Property Subject to a Debt If you contribute property subject to a debt (such as a mortgage), you must reduce the fair market value of the property by: 1. Any allowable deduction for interest you paid (or will pay) that is attributable to any period after the contribution, and 2. If the property is a bond, the lesser of: a. Any allowable deduction for interest you paid (or will pay) to buy or carry the bond that is attributable to any pe- riod before the contribution; or b. The interest, including bond discount, receivable on the bond that is attribut- able to any period before the contribu- tion, and that isn't includible in your in- come due to your accounting method. This prevents you from deducting the same amount as both investment interest and a chari- table contribution. If the recipient (or another person) assumes the debt, you must also reduce the fair market value of the property by the amount of the out- standing debt assumed. The amount of the debt is also treated as an amount realized on the sale or exchange of property for purposes of figuring your taxable gain (if any). For more information, see Bargain Sales under Giving Property That Has In- creased in Value, later. Partial Interest in Property Generally, you can't deduct a charitable contri- bution of less than your entire interest in prop- erty. Right to use property. A contribution of the right to use property is a contribution of less than your entire interest in that property and isn't deductible. Example 1. You own a 10-story office building and donate rent-free use of the top floor to a qualified organization. Because you still own the building, you have contributed a partial interest in the property and can't take a deduction for the contribution. Example 2. Mandy White owns a vacation home at the beach that she sometimes rents to others. For a fundraising auction at her church, she donated the right to use the vacation home for 1 week. At the auction, the church received and accepted a bid from Lauren Green equal to the fair rental value of the home for 1 week. Mandy can't claim a deduction because of the partial interest rule. Lauren can't claim a deduc- tion either, because she received a benefit equal to the amount of her payment. See Con- tributions From Which You Benefit, earlier. Exceptions. You can deduct a charitable con- tribution of a partial interest in property only if that interest represents one of the following items. • A remainder interest in your personal home or farm. A remainder interest is one that passes to a beneficiary after the end of an earlier interest in the property. Example. You keep the right to live in your home during your lifetime and give your church a remainder interest that be- gins upon your death. You can deduct the value of the remainder interest. • An undivided part of your entire interest. This must consist of a part of every sub- stantial interest or right you own in the property and must last as long as your in- terest in the property lasts. But see Frac- tional Interest in Tangible Personal Prop- erty, later. Example. You contribute voting stock to a qualified organization but keep the right to vote the stock. The right to vote is a substantial right in the stock. You haven't contributed an undivided part of your entire interest and can't deduct your contribution. • A partial interest that would be deductible if transferred to certain types of trusts. • A qualified conservation contribution (de- fined later). For information about how to figure the value of a contribution of a partial interest in property, see Partial Interest in Property Not in Trust in Pub. 561. Fractional Interest in Tangible Personal Property You can't deduct a charitable contribution of a fractional interest in tangible personal property unless all interests in the property are held im- mediately before the contribution by: • You, or • You and the qualifying organization receiv- ing the contribution. Publication 526 (2021) Page 9