Donate a boat to charity tax deduction and your charitable contribution?
Please read this page.
Information concerning boats, motorcycles, RVs, motor homes, etc. can
be obtained by visiting the NADA Price Guides website at www.nadaguides.com.
The Fair Market Value of your boat cannot be determined by a charity;
the IRS considers that to be a "conflict of interest". A charity's
tax receipt is, however, proof that you made the donation. The vehicle's
fair market value has to be determined by you, unless the vehicle has
a value of $5000.00 or more, then a certified vehicle appraiser must
make that determination.
All such donations donated to charitable organizations granted tax exemptions
under section 501 (c) (3) of the Internal Revenue Code are tax deductible.
WARNING: Not all charitable organizations
have been granted tax exemption under section 501 (c) (3) of the Internal
Revenue Code. We would advise you to read what is stated by any charity
The IRS has granted tax exemption under section 501 (c) (3) of the Internal
Revenue Code to the charities that pick up boats and trailers.
Itemizing Taxes - Do I need to itemize deductions?
If your primary motivation in donating a boat or other vehicle is to
gain a tax deduction you will need to itemize your deductions on your
Federal and State Tax Returns.
If currently you are not itemizing your deductions on a Long Form, your
accountant would be able to tell you if you donate a boat would justify
switching to itemizing your yearly deductions and using the longer form.
Does the new tax law affect how much I can deduct on my 2005 income tax return?
Thanks to the new tax law, the IRS has taken the guesswork out of how to determine the value of your vehicle.
Beginning January 1, 2005 you may deduct the full price we receive for the sale of your vehicle. This greatly simplifies the process for you in several ways:
If your vehicle sells for more than $500 you’ll know exactly the amount you may deduct, eliminating guesswork. Thus you no longer have to research and come up with an estimate of the fair market value of the vehicle.
This also eliminates the risk of you getting into trouble by overstating the value of your deduction on your tax return.
This saves you both time and risk.
Here is how it works:
Under the new law, if your vehicle sells for $500.00 or more at the dealer auction house, we are now required to send you a receipt containing the following information:
Your name and the VIN of your vehicle;
The fact the donation was "arms length", i.e. that we are not related to you in any way, family or business-wise;
The selling price of your vehicle becomes its fair market value.
This makes the entire procedure very simple for you. And eliminates any risk from the IRS.
If you car sells for less than $500.00 at auction, you may deduct what you consider as the fair market value of your vehicle, as long as that figure is under $500.00.
In this case, we will be sending you a less detailed tax receipt that simply acknowledges your donation (with your name, date of your donation, and the description of your vehicle).
proof do I need for my deduction?
When you donate a boat or trailer you will need a tax receipt with a
501 (c) (3)'s name and Federal Tax ID number on it verifying the date,
the year, make and model of your boat or trailer donation. You should
keep this receipt for at least three years with your all of your tax
information for the year you made the charitable contribution.