about boat donation
Pacific Marine Foundation
receives many questions each year about the various aspects of the boat
donation process. Here are some of the most frequently asked questions
and their answers. We, of course, encourage you to consult with your legal
and tax advisors about your individual situation.
- Doesn't donating a boat mean "giving it
- How do I choose a charity to accept my donation?
- Why should I choose Pacific Marine Foundation?
- Are there any costs involved in donating my boat
to Pacific Marine Foundation?
- How long does it take to complete a donation?
- Do I need a yacht broker to handle this for me?
- What is the difference between a "donation"
and a "bargain sale"?
- What if I want to donate my boat, but I still
owe money on it?
- Are boat donation programs legal?
- What potential problems could come up, and how
do I avoid them?
- What types of boats make the best donations?
- How do I determine "Fair Market Value"?
- What do I need to do to start the donation process?
1. Doesn't donating a boat mean "giving it
Absolutely not! Depending on a taxpayer's individual tax situation
and how the charitable organization uses the donated property, some donors
have actually received more bottom line cash benefits from donation vs.
outright sale, based on tax dollars and related ownership and sales costs
not paid. The primary, and most important, benefit goes to the programs
supported by those charitable organizations.
2. How do I choose a
charity to accept my donation?
There are many organizations soliciting vehicle donations these
days, but only a few that have been in existence for more than a few years
and have the experience necessary to structure your donation properly
to secure the greatest tax benefit for you, while avoiding the pitfalls
that could become problems in the future. When choosing an organization,
be sure to find out how many successful donations they have completed,
and always ask for references from previous donors. You'll also want to
find out what groups are supported by the organization.
3. Why should I choose
Pacific Marine Foundation?
Pacific Marine Foundation has managed hundreds of successful
boat donations for clients over the past decade. With a team of volunteer
and paid professionals on staff -- attorneys, accountants, financial and
marine professionals -- Pacific Marine Foundation offers extensive experience
in structuring donation programs for its long list of clients. To see
what our clients say about us, click
here! Pacific Marine Foundation supports a variety of youth
programs. To see a list, click
4. Are there any costs
involved in donating my boat to Pacific Marine Foundation?
There are no costs involved in donating your property to Pacific
Marine Foundation unless your donation is valued in excess of $5,000,
in which case a "qualified appraisal" is needed. We can assist
you in providing a list of surveyors or appraisers in your area, however,
to avoid any potential conflict of interest, we do not choose the surveyor
or appraiser for you and can not pay for that service. We may be able
to use an existing survey or valuation provided it is no more than 60
days old. We work with you in every way possible to make the transaction
and smooth and pleasant experience.
5. How long does it take to complete a
donation? A donation can be completed in a matter of days. Once
a Deed of Gift is signed and notarized, Pacific Marine Foundation takes
over all of the responsibilities and worries of ownership.This can be
a big plus when you consider the sales process can take as much as a year
or more, costing you a lot of money in moorage, insurance and maintenance
costs, not to mention the time and occasional frustrations in dealing
with prospective buyers, sea trials, etc.
6. What is the difference between a "donation"
and a "bargain sale"? A "donation" is a contribution
in which the donor gives 100% of the property to the charitable organization.
A "bargain sale" is when the donor sells part of the property
to the organization for cash and donates the remaining amount of the "fair
market value". A "bargain donation" in some cases can be
arranged, making the contribution economically feasible.
7. What if I want to donate my boat, but
I still owe money on it? In some cases, Pacific Marine Foundation
may be willing to structure a "bargain sale" contribution such
that the Foundation assumes the existing mortgage and you donate your
remaining interest in the vessel.
8. Do I need a yacht broker to handle
this for me? A yacht broker is not necessary in the donation
process, however, if you already have a broker you trust and would like
us to deal with them, we're happy to do that.
9. Are boat donation programs legal? Yes!
Pacific Marine Foundation is an IRS-approved, publicly supported non-profit
501(c)(3) corporation and has managed hundreds of charitable boat and
property donations since it was established more than 10 years ago. The
Foundation's proven experience in properly structuring donations protects
you from any future problems.
10. What potential problems could come
up, and how do I avoid them? All tax matters are subject to review
("audit") by the IRS up to three years after your tax return
is filed. If your donation does not specifically abide by the current
regulations and you do not have the proper supporting documentation, your
deduction is at risk of being disallowed. That's the main reason to work
closely with an experienced organization such as Pacific Marine Foundation
and with your legal and financial advisors.
11. What types of boats make the best
donations? One common misconception is that only old and dilapidated
boats and properties are donated to charity. Not only is that untrue,
it ignores the fact that in many cases, the donor can receive much greater
tax benefits by donating arranging a "bargain sale" of a newer
vessel. This can be particularly beneficial to businesses or professionals
with high taxable income in high tax brackets. See some of our recent
donations: Custom 85 Steel Trawler, President 50 Motor Yacht,
Romsdal 65 North Sea Trawler.
12. How do I determine
"Fair Market Value"? If your potential donation is
worth less than $5,000, you can value the property yourself using various
sources such as "blue books" and recent sale information. Donations
valued at more than $5,000 must have a "qualified appraisal"
done by a marine surveyor. In both cases, your deduction depends on whether
the charitable organization sells the donated property or uses the property
in its programs. If the property is sold within three years of the donation,
your deduction is the gross sale proceeds received by the charity. If
the property is held by the organization and used for at least three years,
your deduction is the "fair market value" at the time of the
13. What do I need to do to start the
donation process? To further explore how you can benefit from
donating your boat or property to Pacific Marine Foundation, please call
or e-mail us,
or you can complete our Donation
Information Form. We will review your information and respond
as quickly as possible.
Kong & Halvorsen 57
Pro Marine Houseboat 50
More client comments...
"Thank you PMF for your speedy response,
and charting my client a smooth passage through the tax deductible donation
- Gordon Passey, Broker
Prestige Yacht Sales
"Very pleasant and easy to deal with."
"Let me say that working with you
and your organization has been a pleasure. The entire process was
handled very professionally and (to my relief) very painlessly.
"Fair and honest folks to work with.
Great experience. I recommend them highly."
"Thank you so much. This has been quite
an ordeal for me on many planes... you and your charity, as well as the
people you work with, have lifted a great burden from my heart and shoulders."