Lease to Own Older Hatteras

I am entertaining the purchase of a Hatteras that has been donated to a charity foundation.

The only option is lease to own (title in 3 years). I plan on making full payment upfront and keeping the boat for over 3 years so it shouldn't be a problem. I was told that I can get out of the lease as long as I find a purchaser to assume the terms (which means if I paid everything upfront), then the new owner would have to wait until the initial 3 years are up to get the title.

Any advise from fellow boater would be highly appreciated, whether you were aware about such arrangements or not.

Thanks

I've heard that these kinds of deals are fairly common....but I personally would only do it after it was completely checked out and "blessed" by a competent admiralty lawyer. You could probably get a good deal on this boat but just be sure to keep your camel tied tightly in the process.

Walt

It sounds like a novel way to get around IRS requirements for taking a deduction after donating a boat. If it is sold within 3 years of the donation, the donor only can declare the actual amount for which it sold. If the charity "holds" the boat for at least 3 years, the donor can take the entire amount that he declared it to be worth.

Makes me wonder...Could I "donate" my boat to a charity for $250,000, take the deduction, then "lease to Own" it back for $50,000 over a 3 year period?

I would consult a yacht broker who is familiar with these kinds of deals, and NOT the one who is selling the boat, no matter how good he or she is. You want someone without a dog in the hunt to give you an expert opinion.

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Originally Posted by Bob Bradley

It sounds like a novel way to get around IRS requirements for taking a deduction after donating a boat. If it is sold within 3 years of the donation, the donor only can declare the actual amount for which it sold. If the charity "holds" the boat for at least 3 years, the donor can take the entire amount that he declared it to be worth.

Makes me wonder...Could I "donate" my boat to a charity for $250,000, take the deduction, then "lease to Own" it back for $50,000 over a 3 year period?

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This is exactly why it's done. Pretty common practice. The lease term is paid upfront with a very small final payment to purchase at the end. I've always wondered how well it works, particularly from an insurance and liability perspective.

Also, who has the "title" or ownership during the "lease" term? We know it's not in the name of the "lessee" so is it still in the name of the charity and could the charity go toes up or get into trouble or just go away while holding the title?

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Originally Posted by tom5518

Also, who has the "title" or ownership during the "lease" term? We know it's not in the name of the "lessee" so is it still in the name of the charity and could the charity go toes up or get into trouble or just go away while holding the title?

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Charity can give the lessee a lien on the boat to cover that possibility. It's no different from an insurance or liability standpoint than leasing a car. A REALLY EXPENSIVE car. If the charity is AMI Kids they are well known and AFAIK seem to do it all correctly.

I'm wondering if this is the same boat discussed in this thread: http://www.samsmarine.com/forums/sho...crane-Question