Change in yacht donation rules

Boat/US Magazine, March, 2005

Some charitable boating organizations are concerned about recent changes in how deductions for yacht donations are calculated. The American Jobs Creation Act of 2004 altered the rules for the donation of used boats and vehicles, starting this year.

Until now, boat owners could simply deduct an appraised value of their boat or one established based on used boat sales prices or used boat price guides. Under the new law, if the claimed value of the boat exceeds $500 and the boat is sold by the charitable organization, the taxpayer is limited to the gross proceeds from the sale.

Charities must also provide an acknowledgement to the donor within 30 days of the sale stating the amount of gross proceeds. Alternatively, if the charity significantly uses or materially improves the boat, the charity must certify and notify the donor within 30 days.

Many charities are unhappy with the new system, fearing that more boaters will just sell their boats rather than donate them.