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How to complete IRS Form 1098-C

You have a car, boat or an airplane that has $500 or more in value. You want to donate that vehicle to a charitable organization. That’s great and very generous of you. Oftentimes these charity organizations clean up the donated vehicles and then resell them to need individuals at below-market rates. The organization that receives this gift must fill out IRS Form 1098-C and send Copy B to you and Copy A to the IRS. You, the donor, can attach Copy B of Form 1098-C to your income tax return to take a deduction for the contribution. Form 1098-C also confirms that you, the donor, were not part of any future transactions of this vehicle.

IRS Form 1098-C reports Contributions of Motor Vehicles, Boats and Airplanes. The first part of the form asks for the donee name, address, phone and TIN followed by the donor name, address and TIN. There are 7 questions on the form which are discussed below:

Box 1: Shows the date the charity received the donated car, boat or airplane.

Boxes 2a, 2b, 2c reports the year donated, make and model of the vehicle.

Box 3: Shows the vehicle identification number (VIN) or any other identification number for that car, boat and/or airplane.

Box 4a is a check box. The box is checked if the donee certifies that the vehicle was sold in arm’s length transaction to an unrelated party.

Box 4b is the date of sale and box 4c is the gross proceeds from the sale.

If 4a is checked, the donor can generally take a deduction equal to the smaller of the amount in box 4c or the vehicle’s fair market value on the date of the contribution.

Box 5a is checked if the donee certifies that the vehicle will not be transferred for money, other property or service before completion of material improvements or significant intervening use.

Box 5b is checked if the donee certifies that the vehicle is to be transferred to a need individually for significantly below fair market value.

And box 5c is a description of the material improvements made to the donated vehicle.

Box 6a is checked yes if vehicle was donated in exchange for goods or services.

Box 6b is the value of goods and services provided in exchange for the vehicle.

Box 6c asks for a description of the goods and services and has a check box that is checked if the donee certifies that the goods and services consisted solely of intangible religious benefits.

Box 7, the last check box, is checked means the donor may not claim a deduction of more than $500 for this vehicle.

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Erich J. Ruth

Erich J. Ruth provides technical support for National Software which is the parent company for 1099FIRE. 1099FIRE develops and markets a comprehensive range of products that enables any size of business or institution to effectively manage and comply with year-end filing requirements. 1099FIRE is an employee-owned company located in Phoenix, Arizona.

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  1. April 14th, 2014 at 14:29 | #1

    This is just a restatement of the headers on the form boxes. The only interesting question is: 4c gives gross proceeds say $50. Boxes 5a and 5b ARE checked. So can we claim MORE than 4c (subject to limit imposed by Box 7 check box)? Any thoughts?

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