How Does A Boat Donation Tax Deduction Work?

Not many people have a boat lying around somewhere that they don't use anymore, but some do. If you happen to be one of those people, you may want to consider donating it to charity. One of the reasons for that is because you can get a boat donation tax deduction, which is an incentive the government has put in place to encourage more people to donate vehicles to charitable organizations. So how does this work? Let's take a look.

Choosing a Charity to Donate To

Before you can consider making a donation, you have to pick a charity to work with. There are many charities, including the one featured at rawhide.org, that accept this type of donation. This can make it somewhat overwhelming to choose the one that is right for you. Only you can make that ultimate decision, however, since it will depend on the cause that you feel most passionately about. Nevertheless, there are three key pointers that you do have to follow:

1.  The charity must be 501(c)3 registered, or you will not be allowed to claim the tax deduction.
2. The charity should be efficient. Look for a rating of at least 85% if possible. This means that at least 85 cents for every dollar they raise will go directly to their service users and not for administrative, management, or marketing costs.
3.  Make sure that you are working directly with a charity, and not with a middleman.

The Boat Donation Tax Deduction Process

Once you have chosen your charity, you will find that the process is incredibly simple. Rawhide, for instance, enables you to contact them through their website to make arrangements for your boat to be picked up at a time and date that is convenient for you. Once those arrangements have been made, the boat will be sold at auction (some charities do other things with them to raise its value), and you will be provided with a tax receipt for your donation. All you have to do is deduct the value on that tax receipt from your total taxable income for the year.