Boat Prices, spring 2008

[Passages]

Maybe donation is not a scam.

Not sure if it would work for me. My situation is this is the first, and probably last year I fall into Alternative Minimum Tax. With so much money going to Uncle Sam next April, I'm looking for win-win options. the 2 year wait would probably kill it for me.

You are right, HOF is a good place to bounce ideas but talk to an expert before pulling the trigger.

[monty_burns]

Maybe donation is not a scam.
the 2 year wait would probably kill it for me.

As I understand it the two year wait only applies to the 501C3 organization, not you. When the IRS changed the rules they made it more difficult for organizations who don't use the boats they are donated to accept donations. So long as your dealing with an organization that uses the boat you should be fine.

[Roscoe]

Yeah,you should be fine if you are claiming a deduction for fair value but you will be less than fine if the authorities smell a rat whether or not there is one.

Making a subjective valuation based upon independent appraisal that benefits the taxpayer rather than documented cash cost is risky.

When faced with situations that require subjective analysis, the bureaucratic default position is not to risk career potential with an interpretation of rules that may be challenged but to make the claimant's life a living hell with by the book enforcement of regulations that do not assume any of the career risk associated with a tax decision.

[Roscoe]

The IRS changed donation rules a few years ago. There were many, many cars being donated to charitable organizations and written off way beyond market vlaue.
Now currently with boats, if you donate a boat to them you can write off the amount that the charity actually sells the boat for, if it is sold within two years. If the charity leases the boat for to a buyer for two years first, then the actual sales price does not need to be reported.
If the charity uses the donated boat for two years, they can sell it and not report the actual sale price to the IRS.
The two year rule is the key for the person making the donation and how much they can claim as a donation.
As with any tax situation, a CPA or attorney should be consulted, not a yacht broker!

Hi Tucker: So thats why the 58 YF owned by a charity is for sale on YW. The two years is up and now the boat is for sale. I wonder what the chances are of the IRS sniffing around on YW?

[SeaEric]

The IRS changed donation rules a few years ago. There were many, many cars being donated to charitable organizations and written off way beyond market vlaue.
Now currently with boats, if you donate a boat to them you can write off the amount that the charity actually sells the boat for, if it is sold within two years. If the charity leases the boat for to a buyer for two years first, then the actual sales price does not need to be reported.
If the charity uses the donated boat for two years, they can sell it and not report the actual sale price to the IRS.
The two year rule is the key for the person making the donation and how much they can claim as a donation.
As with any tax situation, a CPA or attorney should be consulted, not a yacht broker!

Its my understanding that three years is the current time frame for the charity to retain ownership of a donated boat.