Best Boat Guide

One would think that donating to a charity is a pretty simple concept, right? You have a boat, you want to donate it to charity and in return you get a tax write off. It is true that donating can be beneficial for both you and the charity you choose, but like sailing, not knowing what you are doing can seriously put your at risk. There are things you should definitely know to ensure you have a better understanding of what to expect before you set sail on your donating journey.

The first thing you should do when you decide to donate your boat is contact the organization directly by phone or email. Do not make a commitment to anyone stating they represent a charity. Should your donation be solicited on behalf of an organization, it is important to use caution. Get a phone number and let them know you will contact them when you are ready. Taking this step will keep you protected from for-profit organizations that pose as agents for charities.

Take the time to visit the IRS website and launch a search for qualified charitable organizations. The charities that you choose for your boat donation must be listed here, otherwise you will not get the tax write-off you deserve. If you make this mistake, not only will you owe back the amount you claimed, the IRS could fine you up to 40% depending on the value listed on your return.

The most costly mistake that people make involves when to use the fair market value of the vessel. The twist is, there are two ways that a charity can benefit from your boat donation. They can make needed repairs and sell the boat to help the organization with their financial needs or they can utilize the vessel for education and training purposes.

Although the fair market value may be used to determine the initial dollar amount of your donation, you can only use it if the charity informs you (in writing) they will be using the vessel for training and education. If sold, you can only claim the dollar amount listed on the final sale. The charity will send you documentation (Form 1098-C) of this amount and has thirty days to do so after the purchase. This does not include auctioned items.

Let the experts determine the value of your boat. Small boats, unless very expensive, do not have to be appraised but a bigger vessel should be appraised by a marine surveyor. This person is trained to look the boat or ship over thoroughly to evaluate the exact physical condition. This key information is needed in order to get you the best value for your contribution.

It used to be that you could estimate the value of your boat donation and file your taxes. Once people found a loophole, they took advantage of it and cheated the charitable organizations and the government out of millions of dollars. Drastic changes had to be made in order to repair the damage.

When you make a boat donation ask questions. If the answers are unclear, contact a tax professional or call the tax help line on the IRS website. The qualified charitable organizations listed on the IRS website should also be able to keep you afloat.

Whatever you do, don't lose your motivation. Your contributions to charitable organizations mean the world to future generations. If you know what to expect when donating your boat, you have conquered the worst part of the battle. The rest should be smooth sailing.