Rules To Follow On How To Make A Boat Donation Tax Deduction

One of the incentives people get when they donate to charity is that they can deduct the value of their donation from their taxable income and thereby decrease their taxes. Of course, the opportunity for claiming a tax deduction is the icing on the cake rather than the sole reason for giving. People generally give to charity because they want to help the less fortunate but it also feels good to be able to reduce one's taxes. Meanwhile, it is also vital that people know the rules to follow when claiming a boat donation tax deduction.

Rules for How to Make a Boat Donation Tax Deduction

Exactly what you can deduct from your taxes will all depend on how much it was worth when it was sold. Therefore, the following are the basic rules:

1. You can deduct the fair market value of the boat up to $500 if the boat was sold for $500 or less and you must complete Section A of Form 8283, which is to be attached to Form 1040.
2. You can deduct the sale price, regardless of the fair market value of the boat if it was sold for up to $5,000 and you must complete Section A of Form 8283, which is to be attached to Form 1040.
3. You can deduct the sale price, regardless of the fair market value of the boat if it was sold for $5,000 or more. However, you must also provide evidence of a third party, independent valuation of the boat. You must also complete Section B of Form 8283, which is to be attached to Form 1040.

Other Rules to Be Aware Of

There are a few other rules that you have to be aware of before making a boat donation tax deduction. Mainly, these have to do with what the charity did with your boat before selling it - if they sold it at all - and with the allowable amount of charitable contribution that you can deduct every year. Hence, it is very important that you speak to a tax adviser if you are not 100% sure of the process or what you are supposed to do. A mistake on a tax return should be avoided at all times!