In addition, as taxpayers plan their charitable giving, donors should understand the way that the American Jobs Creation Act of 2004 will alter the rules for the contribution of used motor vehicles, boats and planes after Dec. 31, 2004.

Next year, if the claimed value of the donated motor vehicle, boat or plane exceeds $500 and the item is sold by the charitable organization, the taxpayer is limited to the gross proceeds from the sale.

Under the new rules, the charitable organization must provide an acknowledgement to the donor within 30 days of the sale stating the amount of gross proceeds. Alternatively, if the charity significantly uses or materially improves the vehicles, the charity must certify this intended use and duration and provide an acknowledgement to the donor within 30 days of the contribution. If the charity significantly uses or materially improves the vehicle, generally, the donor may deduct the vehicle's market value.

For the remainder of 2004, however, the new rules do not apply. Under the rules in effect for 2004, taxpayers will be able to deduct the fair market value of the contributed property.

"Just because the rules will be tightened for vehicles donated next year doesn't mean anyone should give a car to charity and claim an inflated value this year," said IRS Commissioner Mark W. Everson.

IRS officials recommend that people who want to donate their vehicle by December 31 check that the organization is qualified by searching Publication 78 at www.irs.gov/bus_info/eo/eosearch.html. Other tips: Itemize in order to benefit; calculate the fair market value, deduct only teh car's fair market value, and document the charitable contribution deduction.