If a church or ministry receives a vehicle valued greater than $500 and it is not sold, you must certify that it is used substantially in the church’s regularly conducted activities. Or, you must certify that the vehicle is to be transferred to a needy individual, at below value, to further the church’s charitable purpose. On Form 1098-C, a detailed description of the vehicle’s use must be supplied. Do not check box 7 or your donor will be limited to a $500 donation. The church/ministry must supply Copies B & C to the donor within 30 days of the contribution if no sale will take place.
Donations of vehicles valued at over $5,000 that will not be sold should have a written appraisal from a qualified appraiser. This is not the responsibility of the church or ministry; it is the responsibility of the donor. The same requirement applies to a non-cash contribution exceeding $5,000.
If the vehicle is sold or disposed within three years additional reporting requirements will apply.
Our next blog will discuss the required forms.
