donating boats

Yes, I know of several that have. No I've not heard that you are going to get audited because of it.

Lots of rules. Basically you only claim what the charity is able to sell it for. And there are some amount of time that they most hold it.

Actually that doesn't apply to boats. You can claim the surveyed replacement value. The charity then uses the boat for their charitable purpose. One donation place I ran yachts for once in a while a long time ago, used to take food and supplies to a church in Bimini, Bahamas, then could sell the boat for any amount once they've used it for that purpose. Since it was then used by the charity, it can then be sold for a different amount than surveyed value......

I agree with Capt J. You value it at a reasonable market price at time of donation. best way to do this is through the surveyed value. I could be wrong but there are too many factors/variables and it wouldn't be fair to be stuck at the price the charity sells it for. For example what if the charity needs money right away and markets it as a fire sale? What if you donate it to the charity at the start of the season and they leave it sitting (un maintained) through the summer till they get around to selling it at the start of fall?

IRS publication 526..States that if charity is benefitting from proceeds of selling the donation, you are only entitled to a deductin up to what they sell it for.....which is market price. If it surveys for $500m but you can only sell it for $150k, then the market value is $150. This is why IRS audits so many people who donate boats...they do it wrong.

http://oceanconservation.org/donate/boat_donations.pdf

On December 31, 2004, the tax laws changed restricting a donor to a maximum tax deduction equal to the value that the charity receives upon sale or liquidation of the vessel, unless it is put to “significant intervening use” in the organization’s regularly conducted activities.

having donated boats more than one i would check with a good tax lawyer first as the laws have changed dramatically in the last few years it also varies from state to state as some have property tax both corp and personal as far as the fed's it has some gray area's as well

good luck travler

Very interesting discussion. We are a 501 (3)(c) in Sarasota, FL. We currently operate a 42 GB Classic (was not donated) and are looking for a sport fisherman in the 40-50 range. My wife and I considered soliciting boat donors, but we did not even know people regularly donated boats, much less how one would go about it.

In any event, at least the seemingly cumbersome process is somewhat more straightforward given we would be using any donated vessel as is, not selling it to generate revenue.

My wife also runs a non profit 501(c)(3)
I have been doing some research because we are looking at taking in a large boat on donation.

If the boat is worth more then 5000.00 then a survey is needed

If we take a boat with a surveyed dollar amount and sell it right away, the tax benefit is only for the sale price.

But if the boat is sold after three years you get the full surveyed value as a tax write off.

If used by the non-profit organization again must be for at least three years.

I have heard of non-profits leasing the boat for three years with a buy out at the end of the three years. Which gives donor full value of donation.

Now some people say it only has to be two years. Not sure about that.

Next week I have appointments with a CPA and the IRS.

I would advise anyone thinking of donating talk with a CPA.

Hi Scott!

Agreed, it is vital that both the charity and
the donor work closely with a CPA on this issue to avoid potential pitfalls. Last week when I met with our CPA regarding this issue he shared with me that he has a lot of experience in this arena (boat donations). He would also work with any potential donor to assure each party is on the same page.

It sounds like you are already working closely with a CPA. However, PM me if you happen to want a referral for a good non-profit CPA. The firm we use is in Sarasota, FL FWIW. (I see you are a long way away, might not be practical to use a guy down here LOL)

Any way many blessings to you and your wife's nonprofit!



John

Thanks Judy

I think you get the tax credit the year you donate, will be getting more info this week.


My wife sanctuary runs all on donations (mostly from me) There is no paid staff. 100% of all donations gos to the birds
but she loves doing it.

zazus house dot org

How does a bird sanctuary use a boat for two or three years? (if that's the case)

We would not try and say we were using it for the rescue. I am sure that would rise a red flag with the IRS.
What we will be doing is leasing and or chartering it out over the next three years. I think this is the proper way to do it. Again will know more later this week after speaking with the CPA.

I would never want to get a donor and or my wife's rescue in trouble, so I will spend whatever is necessary with CPAs and lawyers to make sure of it.

SeaLah Expedition, Inc (our non-profit) is in the boating business. That is all we do. We take people fishing and for boat rides, cruises (church leaders, youth groups, ministry teams, etc). We are not in the boat brokerage business nor are we looking to generate revenue from any vessel that is donated. Basically, truth be known, my wife and I pretty much the major contributers!

That is what I meant in an earlier post that the donation calculus is simplified in our ministry's case: any boat that we received as a donation would be used as a boat in the course of our normal operations. It is, from a tax perspective, relatively straight forward.

I didn't get it before your last post that you intended to lease or charter a donated vessel. I would be really curious to learn what you find out from the CPA about that.