If you donated a vehicle, boat, or airplane to a qualified charity and are claiming a charitable deduction of more than $500, you may receive Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes. This form helps both you and the IRS verify the details of your donation.
For tax purposes, a qualified vehicle includes:
- A motor vehicle primarily designed for use on public streets, roads, and highways
- A boat
- An airplane
How Does Form 1098-C Affect Your Tax Deduction?
The amount you can deduct for a donated vehicle depends on what the charity does with it.
In many cases, your charitable deduction is limited to the amount the charity receives when it sells the vehicle. However, you may be able to claim the vehicle's fair market value if certain exceptions apply, such as:
- The charity makes significant use of the vehicle in its operations.
- The charity makes significant improvements to the vehicle before transferring it.
- The charity sells or gives the vehicle to a needy individual at a price significantly below fair market value to further the charity's mission.
Entering a Form 1098-C Donation in the Program
- Go to Federal.
- Select Deductions and then Select My Forms.
- Choose Itemized Deductions.
- Select Donations to Charity.
- Choose Noncash Donations.
- Indicate that your noncash donations equal $500 or more.
- From the Category drop-down menu, select Vehicles, Boats, Planes, etc.
- Enter the required donation information.
- At the bottom of the next screen, check the box indicating that you were issued Form 1098-C.
- Complete the 1098-C Form Information section.
Important: Attach Your Form 1098-C
The IRS generally requires taxpayers claiming a vehicle donation worth more than $500 to attach a copy of Form 1098-C to their federal tax return.
Be sure to have a PDF copy of your Form 1098-C available so you can upload it when prompted during the filing process.
Additional Information
See Publication 526 - Charitable Contributions for additional information on whether the taxpayer's deduction is limited to the actual sales price of the vehicle.