If you want to donate your boat, yacht, jet ski or other watercraft, you simply need to make sure that the proper paperwork is filed with your local DMV (Department of Motor Vehicles). If you, however, wish to receive a tax deduction for your donation, a little more work is involved. For one, you can only deduct the actual sale price of the watercraft. Also, the watercraft must be sold by or on behalf of a nonprofit organization.
Make sure that the organization that you are donating your boat to is recognized as a nonprofit organization. The organization should be classified as 5013c. Check to see that the organization that you are considering donating to has tax-exempt status by searching through IRS Publication 78 (see Resources below).
Transfer the title. It is best if you transfer the title of your boat over to the nonprofit organization personally. This way you remove liability, stemming from the watercraft, from yourself. You should make sure that the transfer of title is properly recorded with your local DMV.
Get an independent appraiser. Any property that has a value in excess of $5,000 has to be appraised by an independent appraiser before it can be written off. If the boat sells for $500 or less, you can deduct the greater of the fair market value or the sales price so long as that amount is not in excess of $500.
Make sure that you receive an IRS 1098C form. You will need this form in order to receive a tax deduction. You must file this form with your tax return.
Make sure that you receive a receipt for your donation. Make sure that you have a copy of the bill of sale for the boat that you are donating to your chosen charity.
Make sure that you receive an IRS 1098C form. You will need this form in order to receive a tax deduction. You must file this form with your tax return (see Resources below).
- Jupiterimages/BananaStock/Getty Images