Not-for-profit organizations typically engage in a variety of fundraising activities to support their programs and further their tax-exempt purpose. One activity that often resonates with charities and donors alike is the sale of donated vehicles. If your organization currently has or is considering a vehicle donation program, following IRS rules can keep your program running smoothly and preserve your favorable tax status.

Reporting Requirements

If your nonprofit receives gifts of motor vehicles valued at more than $500, you must report certain information to the IRS on Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes. The form may also be used to provide a contemporaneous written acknowledgment to the donor.
  • For each motor vehicle donation, your organization generally must file Copy A of Form 1098-C with the IRS by February 28 — March 31, if you file electronically — of the year following the year in which the charity provides acknowledgement of the gift to the donor. The form asks for:
  • Your organization’s federal identification number
  • The donor’s name and taxpayer identification number
  • The vehicle identification number
  • The date of the vehicle donation and

    • A statement as to whether goods or services were provided in exchange for the donation,
    • A description and good faith estimate of the value of any goods or services provided in return for the donation, and
    • A statement of whether the goods or services provided consisted solely of intangible religious benefits.

You must also certify whether the vehicle:

  • Was sold in an arm’s-length transaction to an unrelated party,
  • Will not be transferred for money, other property, or services before completion of material improvements or significant use, or
  • Is to be transferred to a needy individual for significantly below fair market value in furtherance of your organization’s charitable purpose.
If the vehicle was sold, you must provide the date of sale and the gross proceeds from the sale. Gross proceeds are generally the full sales price without reduction for any expenses or fees incurred in the sale.
Copies B, C, and D of Form 1098-C ask for the same information. Generally, your organization must provide copies B and C to the donor no later than 30 days after the vehicle is sold or 30 days after the contribution if your organization is keeping the vehicle or giving it to a needy person. The donor claiming a charitable deduction for the vehicle donation must attach copy B to his or her federal income tax return.

Donations Under $500 or Over $5,000

Acknowledgements for vehicle donations for which the donor is claiming a charitable contribution deduction of at least $250 but not more than $500 must include the name of the charity and a description (but not the value) of the vehicle (as well as other information). For contribution deductions exceeding $5,000, the donor must file Form 8283, and an authorized official of the charity must complete and sign a portion of the form.