Automobile donations have sharply declined since 2004, when Congress tightened the tax rules for claiming charitable deductions, according to an analysis of IRS data by Grant Thornton.

Before 2005, taxpayers who donated a vehicle were allowed to deduct its fair market value. Tax legislation enacted in 2004 changed the rules to generally limit vehicle donation deductions of over $500 to either the actual proceeds from a vehicle's sale or the vehicle's fair market value, whichever is less.

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