Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes is a source document that a charitable organization files with the IRS when they receive a donation of a qualified vehicle with a claimed value of more than $500. A qualified vehicle is considered (a) any motor vehicle manufactured primarily for use on public streets, roads, and highways, (b) a boat, or (c) an airplane.
The organization is also 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 for this purpose, but the taxpayer might receive this statement in a different form.
A taxpayer's itemized charitable deduction is generally limited to the lesser of the actual sales price of the vehicle when sold by the charity or the vehicle's fair market value, unless 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. Form 1098-C should indicate what the organization has done or is doing with the vehicle by which check box in Box 4a, 5a, or 5b is checked.
To enter a contribution of a motor vehicle, boat, or airplane reported on Form 1098-C or similar statement into TaxSlayer Pro, from the Main Menu of the tax return (Form 1040) select:
- Itemized Deductions (Schedule A)
- Gifts to Charity (8283)
- Non-Cash More than $500 - 8283
- Select Section A (if property value is $5,000 or less) 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.
- Attach a PDF copy of the documents relied on in the Form 1098-C Menu.
- 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 copy 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.
If the value of the donation is not carrying to Schedule A:
- Ensure the vehicle's fair market value has been entered.
- One of the check boxes in Box 4a, 5a, or 5b on Form 1098-C should be checked. Be sure the one that is checked is indicated in the Form 1098-C Edit Menu, and if it's Box 4a ensure the sale date and gross proceeds are entered.
Note: This is a guide on entering Form 1098-C into the TaxSlayer Pro program. This is not intended as tax advice.