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.
Items you will need
- Form 1040
- Schedule A
- Form 8283
- If the charity sells the boat, you can only deduct the actual amount that the charity received for the boat, regardless of fair market value.
- Complete Section A of Form 8283 if the amount of your donation is more than $500. If the amount of your deduction is more than $5,000, complete Section B.
- Keep the documentation received from the charity with your records in case the IRS initiates an audit.
- For more information regarding charitable contributions, refer to the IRS Publication 526.
- IRS: Topic Number 506 – Charitable Contributions
- IRS: Publicaion 526 (2017), Charitable Contributions
- Wheels for Wishes: Car Donation FAQ – Frequently Asked Questions About Donating A Vehicle To Wheels For Wishes
- Forbes: IRS Announces 2017 Tax Rates, Standard Deductions, Exemption Amounts And More
- Forbes: New: IRS Announces 2018 Tax Rates, Standard Deductions, Exemption Amounts And More
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