Before you graciously donate one of your biggest assets, be sure to make the right moves.
People tend to donate their boats to charitable organizations for a lot of reasons. Some people may want to get out from under the expenses of boat ownership and score a great tax deduction at the same time. Others may not have the time to sell it. Some have even over-invested and know the market might never repay them, so instead of swallowing a big loss, they choose the altruistic route. And then there are those for whom a donation gives the satisfaction of helping to support a cause they care about.
Boat donations are a great means of philanthropic giving, but the process is not as simple as some people might think. It must be done right with some planning, research, and the excellent advice of a tax professional. You can turn your old boat into a beautiful gift that helps others without giving yourself the headache of a financial disappointment. You must to do your homework when choosing a charity. In order for you, the donor, to qualify for a tax deduction, the charity that gets your boat donation must be an IRS-approved 501(c)(3) organization. You can check its status through IRS Publication 78.
In order to maximize the deduction you can take, you will want to claim the “fair market value” of your boat, which can best be determined by an appraisal from a certified marine surveyor. For boats with a value larger than $5,000, an appraisal is always mandatory. If the boat is not used by the nonprofit on a regular basis and is sold by the charity in less than three years from the date of donation, your deduction will be the amount the charity received for the sale.
Charity Boats has an excellent reputation for working with donors and taking their intentions for their boats seriously.
If the charities you normally support are not equipped to accept boat donations, find a reputable one, like Charity Boats, that is. You can research organizations through the Better Business Bureau and Charity Navigator.
When you have narrowed your choices down, take the time to learn more about the charity in terms of how your boat will fit in.
