Does Charity Motors basiccally provide a tax loophole?

Factual Questions
1

Gone are the days when you could donate a car and simply claim the fair market value of the car as your tax deduction. Nowadays, when you donate a car, the tax deduction is generally limited to the amount that the charity ultimately sells the car for.

There are certain exceptions to this, such as when the charity chooses to use the vehicle or if it sells the vehicle at a discount to “someone in need.” In these cases you are in fact allowed to deduct the fair market value.

Charity Motors (charitymotors.org) is a car donation organization that basically takes every car donation and sells the car to the aforementioned needy person (you even get to choose which charity finally gets the sales proceeds). This means that anyone who wants to maximize the tax benefits of their donation could simply choose Charity Motors and get the full FMV.

To me, this seems almost too good to be true. The only downside I see is that the charity of your choice receives less money than they normally would because the car is being sold at a discount (of course, the needy person who buys the car receives the benefits of this discount). Other than that, however, it seems like a no-brainer for anyone who wants the most tax benefit from their car donation.

Does anyone have any experience or other info with this organization? Are there other similar organizations that operate this way?

2

Well, firstly, the answer to the thread title is definitely “yes” in that it essentially reopens the tax loophole that lets you claim full FMV for your broken-ass jalopy. I’m skeptical that slightly-cheaper junky used cars for poor folks is really a pressing humanitarian need instead of just a fig leaf to let people claim a bigger tax write-off, but I guess if it keeps some people away from the usurious “buy here pay here” lots it’s doing some good.

As far as how much money gets passed on to the charity, charities make so little on the sorts of junkers that usually get donated that there’s probably not too much of a difference. One way they get sold for next to nothing to poor people, the other way they get sold for next to nothing at wholesale auctions.