Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes is a source document that is filed with the IRS by a charitable organization whenever they receive a donation of a qualified vehicle with a claimed value of more than $500. For these purposes a qualified vehicle is considered any motor vehicle manufactured primarily for use on public streets, roads, and highways; a boat; or an airplane.
When a qualified charity receives a donation of a qualified vehicle where the donor is claiming a value of more than $500, the charity is required to notify the IRS by filing Form 1098-C, and also is required to provide the taxpayer with a contemporaneous written acknowledgment of the donation. An acknowledgment is considered contemporaneous if it is furnished to the taxpayer no later than 30 days after the date of the sale of the vehicle, or the date of the contribution. Copy B of Form 1098-C is typically used as the contemporaneous written acknowledgment.
A taxpayer’s itemized charitable deduction is generally limited to the actual sales prices of the vehicle when sold by the charity. There are situations when the taxpayer can deduct the vehicle’s fair market value, such as when the charity makes significant use of the vehicle, or otherwise donates or sells the vehicle to a needy individual at a significantly below-market price.
See Publication 526 – Charitable Contributions for further information on whether the taxpayer’s deduction is limited to the actual sales price of the vehicle.
To enter a Contribution of a Motor Vehicle, Boat, or Airplane that is reported on Form 1098-C into Keystone Tax Solutions Pro, from the Main Menu of the Tax Return (Form 1040) select:
- Itemized Deductions Menu
- Gifts to Charity (8283)
- Non-Cash More than $500 – 8283
- Select Section A (if property value is less than $5,000) or Section B (if property value is greater than $5,000)
- Select New and enter all of the required information concerning the donated property on this menu. When finished, select EXIT.
- Qualified Vehicle Donated? – Answer YES
- Enter the information from either the Form 1098-C or the contemporaneous written acknowledgement statement, whichever is received.
- When queried, attach a PDF copy of the documents relied on.
- Partial Interests & Restricted Use Property – complete this section if the donation is less than the entire interest in the vehicle and/or if the donor placed conditions on the donation.
If you do not attach a PDF of Form 1098-C or the statement, then you should mail Copy B of Form 1098-C or the statement along with Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return to the IRS.
NOTE: This is a guide on entering Form 1098-C Contributions of Motor Vehicle, Boats, and Airplanes into the Keystone Tax Solutions Pro program. This is not intended as tax advice.
Additional Information:
Publication 526 – Charitable Contributions
Instructions for Form 1098-C – Contributions of Motor Vehicles, Boats, and Airplanes