What time of the year will get you the biggest tax deduction for your boat donation?
When it comes to making charitable donations, most people tend to think about donating at the end of the year. But when it comes to boats, a boat donation may not get you a maximum deduction amount at year end.
Donating a boat to charity that still has value in it’s use (meaning it still runs and is worth something to somebody) will also help you maximize your tax deduction amount. Win-win for you & the charity.
Summer is the Best Donation Time for Boats
According to Chris Edmonston, President of the BoatUS Foundation for Boating Safety and Clean Water, a boating-related 501(c)(3) nonprofit headquartered in Annapolis, Maryland, your best bet for boat donations is summer.
“Donating a boat now during the summer high season can help boaters realize more value for their donations. More boats are sold now [during summer] than at any time of the year, and we believe you deserve the best chance for maximum donation value,” said Edmonston.
Why summer? Because of a 2005 change in tax law in which the IRS bases the value of the charitable deduction on the actual selling price of the donated vessel. Donating a boat in December greatly decreases your chances of a successful tax break for the current year because of the time it takes to sell a boat.
BoatUS Foundation Boat Donation Program
Most charities simply sell the boats donated at an auction, however, the BoatUS Foundation Boat Donation Program is different in that it uses a partner broker to advertise the boat to help realize its highest value. The Foundation also ensures that the donation process runs smoothly, from picking up the boat to handling the paperwork. A charitable boat donation to the Foundation also goes to programs that benefit recreational boaters such as free online boating safety courses.
If you have a well-loved or gently used trailered boat in good working condition and are considering donating, visit the 501(c)(3) BoatUS Foundation at BoatUS.org/donate/boat-donation.
Acceptable donations include:
- Power boats
To understand more about how to donate a boat to charity, be sure to review IRS rules for determining maximum deductions for charitable contributions.
Here are some IRS publications on the topic:
- A Donor’s Guide to Vehicle Donation
- Publication 526, Charitable Contributions
- IRS rules for determining maximum deductions for charitable contributions
Remember you can deduct contributions to charity only if you itemize deductions on Schedule A of Form 1040 and attach a 1098-C form which you receive from the organization you donate to, with your tax return. And of course, boaters should always consult a tax professional regarding boat donations or other charitable donations.
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