Contributions of Motor Vehicles, Boats, and Airplanes

2018

Instructions for Form 1098-C

Department of the Treasury
Internal Revenue Service

Contributions of Motor Vehicles, Boats, and Airplanes
Section references are to the Internal Revenue Code unless otherwise
noted.

General Instructions for Certain Information Returns for information on
how to file.

Future Developments
What's New

Do not file Form 1098-C for a contribution of a qualified vehicle
with a claimed value of $500 or less. However, you may use it as
CAUTION 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 TIN on the form. You
may, but are not required to, enter the donee's federal TIN on the form.

Penalty rate change. The multiplier for computing a section 6720
penalty has been reduced from 39.6% (0.396) to 37% (0.37).

Section 6720 Penalties

For the latest information about developments related to Form 1098-C
and its instructions, such as legislation enacted after they were
published, go to IRS.gov/Form1098C.

Online fillable form. Due to the very low volume of paper Forms
1098-C received and processed by the IRS each year, these forms have
been converted to an online fillable format. You may fill out the forms,
found online at IRS.gov/Form1098C, and send Copy B to the donor. For
filing with the IRS, follow your usual procedures for filing electronically if
you are filing 250 or more forms. If you are filing these forms on paper
due to a low volume of recipients, for these forms only, you may send
in the black-and-white Copy A with Forms 1096 that you print from the
IRS website.

Reminder

In addition to these specific instructions, you should also use the 2018
General Instructions for Certain Information Returns. Those general
instructions include information about the following topics.
Who must file (nominee/middleman).
When and where to file.
Electronic reporting requirements.
Corrected and void returns.
Statements to recipients.
Taxpayer identification numbers (TINs).
Backup withholding.
Penalties.
Other general topics.
You can get the general instructions at General Instructions for
Certain Information Returns or IRS.gov/Form1098C.

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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).

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CAUTION

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 (FMV). Vehicles sold at
auction are not sold at prices significantly below FMV, 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 37%
(0.37).
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 37% (0.37).

Specific Instructions
Who Must File
A donee organization must 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:
Date of the sale, if you are required to check box 4a; or
Date of the contribution, if you are required to check box 5a or 5b.

Donor's TIN
See part J of the 2018 General Instructions for Certain Information
Returns for details on requesting the donor's TIN. If the donor does not
provide a TIN, 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.
Truncating donor's TIN on acknowledgements. Pursuant to
Treasury Regulations section 301.6109-4, all filers of this form may
truncate a donor’s TIN (social security number (SSN), individual
taxpayer identification number (ITIN), adoption taxpayer identification
number (ATIN), or employer identification number (EIN)) on written
acknowledgements. Truncation is not allowed on any documents the filer
files with the IRS. A filer’s TIN may not be truncated on any form. See
part J in the 2018 General Instructions for Certain Information Returns.

Box 1. Date of Contribution
Enter the date you received the motor vehicle, boat,
or airplane from the donor.

Provide the donor with Copies B and C of Form 1098-C or your own
acknowledgment that contains the required information. See the 2018
Jan 02, 2018

Other penalties may apply. See part O in the 2018 General
Instructions for Certain Information Returns.

Cat. No. 39750N

Boxes 2a, 2b, 2c, and 2d. Odometer Mileage,
Year, Make, and Model of Vehicle

not include the use of a vehicle to provide training in business skills, such
as marketing or sales. Examples of significant use include the following.
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.
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.

Enter the appropriate information in each box. Enter mileage only for
motor vehicles in box 2a. The following table shows three examples.
Box 2a Odometer
mileage

Box 2b - Year

Box 2c - Make

Box 2d - Model

90,000

2006

Ford

Explorer

Example 2 airplane

1968

Piper

Cub

Example 3 boat

2008

Larson

LXI 208

Example 1 car

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CAUTION

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 FMV

Donees must ensure that the odometer reading is in miles, not
kilometers. If the odometer is calibrated in kilometers, you must
convert the kilometers to miles using the following calculation.

Check box 5b if you intend to sell the vehicle to a needy individual at a
price significantly below FMV 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 deduction 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.

Kilometers x 0.62137 = miles.

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 (VIN) is 17
alphanumeric characters in length. Refer to the vehicle owner's manual
for the location of the VIN. 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 alphanumeric
characters in length and is located on the tail of a U.S. aircraft.

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 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.

Box 6a. Checkbox for Whether Donee Provided
Goods and Services in Exchange for the Vehicle
Described

Box 4b. Date of Sale

Box 6b. Value of Goods and Services Provided
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 in boxes 2a,
2b, 2c, 2d, and 3.

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 “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 4c. Gross Proceeds
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 6c. Description of the Goods and Services

Box 5a. Vehicle Will Not Be Transferred Before
Completion of Material Improvements or
Significant Intervening Use

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.

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.

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.

There is significant intervening use only if the organization actually
uses the vehicle to substantially further the organization's regularly
conducted activities, and the use is 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

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 TIN, 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.

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Instructions for Form 1098-C (2018)