Is A Boat Donation Tax Deduction A Good Idea?

A lot of people are interested in donating boats to charity because of the tax deduction they can get as a result of the donation. But is this a good idea? As with all things about taxes, it is important that you understand the ins and outs of how things work, and you need to make sure that you stick to the rules.

Can You Claim a Boat Donation Tax Deduction?

The simple answer to this question is "yes". However, you need to make sure that the charity that receives your donate is 501(c)3 registered, which confirms with the IRS that it has charitable status and will not use your donation for anything other than for service delivery. The second important question is "should you file for a boat donation tax deduction"?

The Pros and Cons of a Claiming a Boat Donation Tax Deduction

The value of any donation that you give to a charity can be deducted from your taxable income so long as you keep the receipt and the charity is 501(c)3 registered. This means that, instead of donating a boat, you could also sell the boat yourself and donate the money. Of course, there is quite a bit of hassle involved in doing so. However, there is a risk that you may accidentally use your generosity to line the pockets of for-profit businesses.

There are some companies that act on behalf of charities. They claim to have excellent selling procedures in place that enable them to maximize the value of your donation. They also have huge advertising budgets, which means more people can be reached and encouraged to make donations. However, in return for that, they keep a huge chunk of the donation proceeds for themselves. In fact, in some cases, they keep as much as 95%. The majority of these businesses keep at least half of the money raised, which means only half of what you had intended to use for good will actually go the charity and its service recipients.

Does this mean you shouldn't make a donation? Absolutely not. It simply means that you should not just check whether the charity is 501(c)3 registered, but also that it is actually the charity you are dealing with directly.