Specific Instructions for Form 1098-C
File a separate Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, with the IRS for each contribution of
a qualified vehicle that
has a claimed value of more than $500. A qualified vehicle is any motor vehicle manufactured primarily for use on public streets,
roads, and highways;
a boat; or an airplane. However, property held by the donor primarily for sale to customers, such as inventory of a car dealer,
is not a qualified
vehicle.
Contemporaneous Written Acknowledgment
If a donor contributes a qualified vehicle to you with a claimed value of more than $500, you must furnish a contemporaneous
written acknowledgment
of the contribution to the donor under section 170(f)(12) containing the same information shown on Form 1098-C. Otherwise,
the donor cannot claim a
deduction of more than $500 for that vehicle. Copy B of Form 1098-C may be used for this purpose. An acknowledgment is considered
contemporaneous if
it is furnished to the donor no later than 30 days after the:
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Date of the sale, if you are required to check box 4a, or
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Date of the contribution, if you are required to check box 5a or 5b.
Provide the donor with Copies B and C of Form 1098-C or your own acknowledgment that contains the required information. For
contributions for which
you completed an acknowledgment in calendar year 2007, file Copy A with the IRS by February 28, 2008 (March 31, 2008, if filed
electronically). See
the 2007 General Instructions for Forms 1099, 1098, 5498, and W-2G for more information on how to file.
For a contribution of a qualified vehicle with a claimed value of not more than $500, do not file Form 1098-C. However, you
may use it as the
contemporaneous written acknowledgment under section 170(f)(8) by providing the donor with Copy C only. If you use Copy C
as the acknowledgment, you
must check box 7. In addition, do not complete boxes 4a through 5c or enter the donor's identification number on the form.
You may, but are not
required to, enter the donee's federal identification number on the form.
Section 6720 imposes penalties on any donee organization that is required under section 170(f)(12) to furnish an acknowledgment
to a donor if the
donee organization knowingly:
-
Furnishes a false or fraudulent acknowledgment or
-
Fails to furnish an acknowledgment in the manner, at the time, and showing the information required by section 170(f)(12).
Other penalties may apply. See part O in the 2007 General Instructions for Forms 1099, 1098, 5498, and W-2G.
An acknowledgment containing a certification described in box 5a or 5b will be presumed to be false or fraudulent if the qualified
vehicle is sold
to a buyer other than a needy individual (as explained in the instructions for box 5b) without a significant intervening use
or material improvement
(as explained in the instructions for box 5a) within 6 months of the date of the contribution. If a charity sells a donated
vehicle at auction, the
IRS will not accept as substantiation an acknowledgment from the charity stating the vehicle is to be transferred to a needy
individual for
significantly below fair market value. Vehicles sold at auction are not sold at prices significantly below fair market value,
and the IRS will not
treat vehicles sold at auction as qualifying for this exception.
The penalty for an acknowledgment relating to a qualified vehicle for which box 4a must be checked is the larger of the gross
proceeds from the
sale or the sales price stated in the acknowledgment multiplied by 35%. The penalty for an acknowledgment relating to a qualified
vehicle for which
box 5a or 5b must be checked is the larger of $5,000 or the claimed value of the vehicle multiplied by 35%.
Donor's Identification Number
See part J of the 2007 General Instructions for Forms 1099, 1098, 5498, and W-2G for details on requesting the donor's identification
number. If
the donor does not provide an identification number, you must check box 7 because the acknowledgment will not meet the requirements
of section
170(f)(12) and the donor will not be allowed to claim a deduction of more than $500 for the qualified vehicle.
Box 1. Date of Contribution
Enter the date you received the motor vehicle, boat, or airplane from the donor.
Box 2. Make, Model, and Year of Vehicle
Enter this information in the order stated. For example,
enter “Ford Explorer, 2000,” “Piper Cub, 1962,” or “Larson LXI 210, 2002.”
Box 3. Vehicle or Other Identification Number
For any vehicle contributed, this number is generally affixed to the vehicle. For a motor vehicle, the vehicle identification
number is 17
alpha/numeric characters in length. Refer to the vehicle owner's manual for the location of the vehicle identification number.
For a boat, the hull
identification number is 12 characters in length and is usually located on the starboard transom. For an airplane, the aircraft
identification number
is 6 alpha/numeric characters in length and is located on the tail of a U.S. aircraft.
Box 4a. Vehicle Sold in Arm's Length Transaction to Unrelated Party
If the vehicle is sold to a buyer other than a needy individual (as explained in the instructions for box 5b) without a significant
intervening use
or material improvement (as explained in the instructions for box 5a), you must certify that the sale was
made in an arm's length transaction between unrelated parties. Check the box to make the certification. Also complete boxes
4b and 4c. Skip this
box if the qualified vehicle has a claimed value of $500 or less.
If you checked box 4a, enter the date that the vehicle was sold in the arm's length transaction. Skip this box if the qualified
vehicle has a
claimed value of $500 or less.
If you checked box 4a, enter the gross proceeds from the sale of the vehicle. This is generally the sales price. Do not reduce
this amount by any
expenses or fees. Skip this box if the qualified vehicle has a claimed value of $500 or less.
Box 5a. Vehicle Will Not Be Transferred Before Completion of Material Improvements or Significant Intervening Use
If you intend to make a significant intervening use of or a material improvement to this vehicle, you must check box 5a to
certify that the vehicle
will not be transferred for cash, other property, or services before completion of the use or improvement. Also complete box
5c. Skip this box if the
qualified vehicle has a claimed value of $500 or less.
To constitute significant intervening use, the organization must actually use the vehicle to substantially further the organization's
regularly
conducted activities, and the use must be significant, not incidental. Factors in determining whether a use is a significant
intervening use include
its nature, extent, frequency, and duration. For this purpose, use includes providing transportation on a regular basis for
a significant period of
time or significant use directly relating to training in vehicle repair. Use does not include the use of a vehicle to provide
training in business
skills, such as marketing or sales. Examples of significant use include:
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Driving a vehicle every day for 1 year to deliver meals to needy individuals, if delivering meals is an activity regularly
conducted by the
organization.
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Driving a vehicle for 10,000 miles over a 1-year period to deliver meals to needy individuals, if delivering meals is an activity
regularly
conducted by the organization.
Material improvements include major repairs and additions that improve the condition of the vehicle in a manner that significantly
increases the
value. To be a material improvement, the improvement cannot be funded by an additional payment to the donee from the donor
of the vehicle. Material
improvements do not include cleaning, minor repairs, routine maintenance, painting, removal of dents or scratches, cleaning
or repair of upholstery,
and installation of theft deterrent devices.
Box 5b. Vehicle To Be Transferred to a Needy Individual for Significantly Below Fair Market Value
Check box 5b if you intend to sell the vehicle to a needy individual at a price significantly below fair market value or make
a gratuitous transfer
of the vehicle to a needy individual in direct furtherance of your organization's charitable purpose of relieving the poor
and distressed or
underprivileged who are in need of a means of transportation. Do not enter any amount in box 4c. The donor's contribution
for a sale for this purpose
is not limited to the gross proceeds from the sale. Skip this box if the qualified vehicle has a claimed value of $500 or
less.
Box 5c. Description of Material Improvements or Significant Intervening Use and Duration of Use
Describe in detail the intended material improvements to be made by the organization or the intended significant intervening
use and duration of
the use by the organization. Skip this box if the qualified vehicle has a claimed value of $500 or less.
Box 6a. Checkbox for Whether Donee Provided Goods and Services in Exchange for the Vehicle Described
You must check the box to indicate whether you provided goods or services to the donor in exchange for the vehicle described
above.
Box 6b. Value of Goods and Services Provided in Exchange for the Vehicle Described
If you checked “Yes” in box 6a, complete box 6b. You must give a good faith estimate of the value of those goods and services including
intangible religious benefits. Include the value of any goods and services you may provide in a year other than the year that
the qualified vehicle
was donated. Pub. 561, Determining the Value of Donated Property, provides guidance for providing an estimate for the value
of goods and services.
Box 6c. Description of the Goods and Services
If you checked “Yes” in box 6a, describe in detail the goods and services, including intangible religious benefits, that were provided to the
donor. If the donor received only intangible religious benefits, check the box.
An intangible religious benefit is one that is provided by an organization organized exclusively for religious purposes and
which generally is not
sold in a commercial transaction outside the donative context.
Box 7. Checkbox for a Vehicle With a Claimed Value of $500 or Less
If the vehicle has a claimed value of $500 or less or the donor did not provide a taxpayer identification number, you must
check box 7. If you
check box 7, do not file Copy A with the IRS and do not furnish Copy B to the donor.