How to Donate a Boat & Deduct it From Taxes

If you have a boat that you realize you're not using, you can donate the boat to charity. As with other charitable donations, you can claim a tax deduction for donating a boat. Exactly how much you can claim depends on the boat's value and what the charity does with it.

Donating Boats for a Tax Deduction

The IRS generally gives a tax break for donations to charity if you itemize your deductions on your Form 1040 tax return. Special rules apply if you're taking a deduction for a vehicle, including a car, a boat or a plane.

Generally, if the donation is worth more than $500, and the charity sells it, you can deduct the lesser of the proceeds from the sale or the fair market value on the day you donated it. If it's worth less than $500, you can simply claim the fair market value of the boat or other vehicle on the day you donate it.

Note that if the donation is worth more than $250, you should receive a written statement acknowledging the donation, and if it's worth more than $500, you should receive IRS Form 1098-C from the charity. That form will outline your contribution and include information about if or when it was sold and how much it was worth. You must include it when you file your taxes. If you don't receive the form in time to file by the IRS filing deadline, you can either request an extension from the IRS or file without the form, filing an amended return with IRS Form 1040X when you get the 1098-C.

Exceptions if the Charity Uses the Boat

If you donate a boat to the charity and the charity actually uses the boat rather than selling it, then different rules apply. In that case, including if the charity passes the boat on to a needy person for free or significantly below cost as part of its mission, you can generally deduct the fair market value at the time the boat was donated.

The charity will still give you a Form 1098-C before you file taxes, and the form will indicate that the charity is using the boat or has given it to a needy person. This exception doesn't apply if the boat is sold at auction.

Deductions Under 2018 Tax Law

It generally only makes sense to itemize your deductions, including charitable donations, if you're claiming more than the standard deduction. For 2018, that's $12,000 for single people and $24,000 for married couples filing jointly. If your donations and other deductions aren't greater than that amount, it can save you some paperwork in terms of documenting your donations for the IRS.

Deductions Under 2017 Tax Law

For 2017, the same logic applies, except that the standard deduction amounts are $6,350 for single filers and $12,700 for married couples filing jointly. If your total deductions don't hit those amounts, then it's not worth itemizing.

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