In a Nutshell
If you donate a qualified vehicle worth more than $500, the charity should send you Form 1098-C. The tax form provides the IRS with details about your donation. You’ll need to file your 1098-C with your federal income tax return if you want to claim your donation as an itemized deduction.This article was fact-checked by our editors and a member of the Credit Karma product specialist team, led by Senior Manager of Operations Christina Taylor.
You probably don’t donate a car, truck, boat or plane to charity every year — so you likely don’t get a Form 1098-C every year, either.
That’s why you may not be sure what to do with Form 1098-C when you get one. Receiving a 1098-C means you may be able to claim a tax deduction for donating a vehicle to charity — whether you donate a shiny new car that you won in a raffle, a pickup truck that’s seen better days or a boat that turned out to be more work than you bargained for.
But you can only take the deduction if your contribution meets certain criteria, and you’ll have to itemize your deductions to take the tax write-off. If you want to take a deduction of more than $500 for your vehicle donation, you’ll generally need the information on Form 1098-C to demonstrate to the IRS that you qualify for the deduction.
Let’s look at Form 1098-C, the information it contains and how it can help you claim a deduction for donating a vehicle to charity.
- What is a Form 1098-C?
- Why did I get a Form 1098-C?
- What information is on a Form 1098-C?
- What should I do with my 1098-C?
What is a Form 1098-C?
If you’ve gone to college or taken out a mortgage or student loan, you’re probably familiar with Form 1098-T, Form 1098 and Form 1098-E, respectively. These forms report various exchanges between you and another person or company. Form 1098-C is similar: It records the transfer of an entire vehicle between you and a charity.
Specifically, the IRS says Form 1098-C covers donations of the following:
- Motor vehicles made primarily for use on public streets, roads and highways
- Boats
- Airplanes
Why did I get a Form 1098-C?
If you donate a vehicle that’s worth more than $500 to a charity, the IRS requires the recipient organization to report the donation by completing and filing a Form 1098-C. The charity is supposed to do this for every vehicle donation it receives with a claimed value of more than $500.
1098-C includes three copies: A, B and C. The charity will file Copy A (“For Internal Revenue Service”) with the IRS, and send you Copy B (“For Donor”) and Copy C (“For Donor’s Records”). In turn, you’ll file Copy B with your own federal income tax return if you want to claim a deduction of more than $500. Copy C is a copy for your records.
If you happen to donate a vehicle worth less than $500, the IRS doesn’t require the charity to complete and file Form 1098-C —though the charity has the option of completing Copy C and furnishing it to you as a written acknowledgement of your donation.
What information is on a Form 1098-C?
Form 1098-C, Contributions of Motor Vehicles, Boats and Airplanes is a one-page form. Here’s a breakdown of what’s on the form.
Donee’s data
The first box on the 1098-C form is for the name, full address and phone number of the recipient organization. Below it is a box for the donee’s taxpayer identification number, or TIN.
Donor’s data
Below the donee info you’ll find fields for the donor’s TIN (typically an individual’s Social Security number), name and full address.
Box 1
This shows the date you handed the vehicle over to the charity.
Boxes 2a, b, c and d
These boxes contain information about the vehicle, specifically the mileage, year, make and model.
Box 3
If you donated a car or a truck, this is where you’ll find the VIN. If it’s a boat or a plane, this is where the hull ID number or aircraft ID number can be found.
Boxes 4a, b and c
This is where the meat of the form starts kicking in, and it’s where you can start using some of the numbers for your own purposes.
There are several things a charity can do with your donated vehicle. It’s common for charities to opt for selling your donated vehicle for cash to the highest bidder. In that case, you’ll see that Box 4 is filled out. It’ll tell you the date of sale when the charity sold your donated vehicle and the amount it sold for. Generally, you can take a deduction for the amount shown in box 4c (the gross proceeds of selling your vehicle) or the vehicle’s fair market value, whichever is less.
Boxes 5a, b and c
The donee organization can also choose to use the vehicle for its own use (think meals-on-wheels or animal rescue mobiles), make significant “material improvements” to the vehicle, or even give away the vehicle or sell it at a big discount to a needy individual related to the charity’s work.
If that’s the case, the charity will fill out Box 5, along with what modifications it made to your donated vehicle (if any).
Boxes 6a, b and c
Sometimes, the charity provides you with goods or services in exchange for your donation. If the charity gave you anything at all in exchange for your donation, it’ll report it here along with the value of the services or goods you received.
Box 7
If you donate a vehicle that’s worth less than $500, or you didn’t provide the donee with your TIN, the charity will check this box. If this box is checked, the charity isn’t required to file a copy of the 1098-C with the IRS, and it doesn’t have to give you a copy.
What should I do with my Form 1098-C?
If your donation is worth more than $500 and you receive a Form 1098-C for it, you’ll need to attach the form when you file your federal tax return if you plan on claiming a charitable contributions deduction. You’ll also need to itemize your taxes on Schedule A in order to claim this deduction. And you’ll need to file another form — Form 8283 — which provides information on non-cash contributions worth more than $500.
If the charity sold your vehicle for more than $500 (and not at a discount to a needy person), you can deduct the final sale price — if it’s less than the fair market value of the vehicle. This can be found in Box 4c. Otherwise, if the charity decides to use your vehicle, sell it for a cheap price to a needy person, or make improvements to it, you can generally deduct the vehicle’s fair market value.
Finally, if the charity sells your vehicle for $500 or less, a special rule applies. Your deduction will either be the fair market value of the vehicle on the day you donated it or $500, whichever is less. You’ll still need a written acknowledgement from the charitable organization in order to claim the deduction.
Learn more about how to donate a carBottom line
Donating a vehicle to charity could help you get a tax deduction when you file your federal income tax return. Keep in mind you’ll need to itemize deductions in order to claim a deduction for charitable giving. And your donation will need to meet all IRS rules to qualify for the deduction, including being made to a qualifying organization.
If you receive a Form 1098-C for your donation of a motor vehicle, boat or airplane, the form may be necessary to help you claim a charitable deduction. The IRS provides a detailed guide for donating your car. And you can e-file your return for free while claiming the deduction as long as you use a tax preparation and filing service that doesn’t charge to itemize deductions and that supports Form 1098-C.
Christina Taylor is senior manager of tax operations for Credit Karma. She has more than a dozen years of experience in tax, accounting and business operations. Christina founded her own accounting consultancy and managed it for more than six years. She codeveloped an online DIY tax-preparation product, serving as chief operating officer for seven years. She is the current treasurer of the National Association of Computerized Tax Processors and holds a bachelor’s degree in business administration/accounting from Baker College and an MBA from Meredith College. You can find her on LinkedIn.