Qualified Vehicles
- Cars or motor vehicles manufactured for use on public streets, roads, and highways
- Boats
- Airplanes
Who Uses a 1098-C?
Charitable organizations file Form 1098-C, also known as Contributions of Motor Vehicles, Boats, and Airplanes, with the IRS to document the donation of a vehicle worth more than $500. The form documents information about the vehicle, as well as what the organization intends to do with it.
The donee also sends a copy of Form 1098-C to the donor.
A separate Form 1098-C should be filed for each donated vehicle, even if the donor was the same.
Deadlines
If the recipient of the donated vehicle sells the vehicle, then Form 1098-C must be furnished to the original donor within 30 days after the sale. Otherwise, a copy of Form 1098-C should be sent to the donor by February 28 the year after the donation occurs or March 31 if filing electronically.[1]
1098 Series
The 1098 forms are used to report tax-deductible expenses to the IRS.
1098: Used to report interest payments related to a mortgage
1098-C: Used to report donations of vehicles to charitable organizations
1098-E: Used to report interest paid on qualified student loans
1098-T: Used to report tuition payments for post-secondary education
1098-MA: Used to report payments from the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets
1098-C Form Parts (21)
Donee’s Information
Enter the name, street address, city or town, state or province, country, ZIP code, and telephone number of the recipient of the qualified vehicle, or the donee.
Donee’s TIN
Enter the Taxpayer Identification Number (TIN) for the donee. This can be a social security number, individual taxpayer identification number, adoption taxpayer identification number, or employer identification number.
Donor’s TIN
Enter the TIN of the donor of the vehicle.
Donor’s Information
Enter the name, street address, city or town, state or province, and ZIP code of the donor.
Box 1: Date of Contribution
Enter the date the qualified vehicle was received from the donor.
Box 2a: Odometer Reading
Enter the mileage on the vehicle at the time of donation. Make sure the odometer reading is reported in miles, not kilometers. Use the following formula to convert kilometers into miles: kilometers x 0.62317 = miles.
Box 2b: Vehicle Year
Enter the year of the vehicle. Use a four-digit format (e.g. “2023”).
Box 2c: Vehicle Make
Enter the make of the vehicle, or the brand.
Box 2d: Vehicle Model
Enter the specific model of the vehicle.
Box 3: VIN
For a motor vehicle, the vehicle identification number (VIN) is 17 characters in length and affixed to the vehicle. The hull identification number for a boat is 12 characters and located on the starboard transom. For an airplane, the identification number is six characters and is located on the tail of a U.S. aircraft.
Box 4a
Check this box if the donated vehicle was sold to the highest bidder.
Box 4b: Date of Sale
If Box 4a was checked, then in Box 4b enter the date the vehicle was sold.
Box 4c: Gross Proceeds
If Box 4a was checked, then in Box 4c enter the gross proceeds from the sale.
Box 5a
Check Box 5a to certify that the vehicle will not be transferred to a needy individual before the completion of material improvements or significant intervening use. This essentially means that the charity will use the vehicle for its own purposes.
Material improvements include major repairs that significantly increase the value of the vehicle. Significant intervening use occurs when the donee organization uses the vehicle regularly to further its activities.
Box 5b
Check the box to certify that the vehicle will be transferred to a needy individual for an amount significantly lower than the fair market price.
Box 5c: Description of Improvements
Describe, in detail, any material improvements made to the vehicle or any intervening use. Include the duration of the intervening use.
Box 6a
Check “Yes” if any goods or services were provided in exchange for the donation of the vehicle, and “No” if not.
Box 6b: Value
If “Yes” was checked in Box 6a, enter the value of those goods and services in Box 6b.
Box 6c: Description
If “Yes” was checked in Box 6a, describe those goods and services in Box 6c. Check the box in Box 6c to certify that goods and services consisted solely of “intangible religious benefits,” or benefits provided by an organization organized exclusively for religious purposes.
[2]
Box 7
Check Box 7 if the vehicle is valued at less than $500 or if the donor did not provide a TIN. If this box is checked, do not file Copy A with the IRS.
Tax Year
Enter the year in which the vehicle was donated.
Instructions for Filers (4 Steps)
1. Obtain Donor TIN
Use
Form W-9 to request the donor’s TIN.
3. File Copy A with IRS
File electronically through the
IRS FIRE System. If Box 7 is checked, do not file Copy A with the IRS.
4. Send Copies B and C to Donor
Furnish Copies B and C of Form 1098-C to the donor. If Box 7 is checked, furnish only Copy C.
Frequently Asked Questions (FAQs)
What do I do if I receive Form 1098-C?
Use Form 1098-C to fill out your federal income tax return (Form 1040), as donations of vehicles worth more than $500 are tax-deductible.[4] Attach Copy B to your return as proof. Keep Copy C for your records.
Are there penalties for not following specific instructions for completing Form 1098-C?
Yes, and they’re hefty. The tax code assigns penalties for failing to furnish Form 1098-C according to IRS instructions, or for entering false or fraudulent information into Form 1098-C.[5]
If it can be determined that the donated vehicle was sold to someone who does not qualify as a needy individual, the penalty is either gross proceeds from the sale or the sales price multiplied by 39.6%, whichever is larger.[6]
What if the donor does not provide a TIN?
The donor will not be allowed to claim a deduction of more than $500 for the qualified vehicle. Check Box 7, send Copy C to the donor, and do not file Copy A with the IRS.
