Yacht donations go towards scientific expeditions, instrument deployments, and educational outreach events. SeaKeepers will facilitate the yacht donation from working out the paperwork to picking up the boat. SeaKeepers will accept responsibility for the vessel “as is, where is.” The contribution of your vessel can immediately eliminate your ownership cost and considerably reduce your income tax burden. SeaKeepers recommends that any yacht/boat owner considering making a contribution consult their tax advisor.
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HOW DO I REALLY KNOW IF IT IS FINANCIALLY FEASIBLE FOR ME TO CONTRIBUTE MY VESSEL TO A TAX EXEMPT ORGANIZATION?
There are numerous tax advantages of donating a yacht to SeaKeepers. Before donating, however, you should consider: the length of time the boat has been on the market, the costs of maintenance, insurance, dockage, and personnel. An added benefit of donating is that brokerage commission will be payable if your boat is sold through a yacht broker. As well as the speed in which an owner can divest themselves of their boat and relieve the continuing costs associated with ownership.
WHAT SIZE BOATS/YACHTS CAN BE DONATED TO SEAKEEPERS?
All types and sizes of vessels are accepted. We have a wide scope of industry contacts, educational institutions and scientists that have very different needs. The donor’s tax benefit depends on the fair market value of the donated boat.
HOW DO YOU TRANSFER OWNERSHIP?
If the yacht is titled and registered, the owner signs the title and/or registration on the back of the document where the word “SELLER” appears and signs a Deed of Gift. If the vessel is documented, the owner must also execute an appropriate Deed of Gift which is similar to a Bill of Sale for a documented vessel. Title to the vessel is transferred to the receiving organization on the date of the Deed of Gift.
WHAT SPECIFIC FEDERAL INCOME TAX REQUIREMENTS DO I HAVE AS A DONOR?
Generally, if you claim a charitable deduction of more than $5,000 for any item of property (other than money or publicly traded securities) or for a group of similar items of property, you must:
- obtain a qualified appraisal.
- attach a fully completed appraisal summary to the tax return on which you first claim the deduction for the contributed property (the IRS supplies a form which must be completed and used for appraisal summary).
- maintain records required by IRS regulations to document the gift, including records showing the cost basis and acquisition date of the property.
WHAT IS A QUALIFIED APPRAISAL?
A “qualified appraisal” is an appraisal document that fulfills the requirements of IRS regulations and:
- relates to an appraisal made less than or equal to 60 days prior to the date of the contribution
- was made by an appraiser whose appraisal fee was not based on a percentage of the appraised value of the property
- is prepared, signed and dated by a qualified appraiser
A “qualified appraiser” is an individual who includes the statement required by IRS regulations in the appraisal summary. The appraiser must not have had knowledge of facts which would cause a reasonable person to expect the appraiser to falsely overstate the value of the donated property. The appraiser must not be the donor, the taxpayer, the gift recipient, a party to the transaction in which the donor acquired the property, any employee of the above, any person related (as defined by IRS regulations) to any of the above, or any person whose independence as an appraiser would be questioned by a reasonable person. A dealer, yacht broker, yacht salesman or marine surveyor may be a qualified appraiser if he meets the above requirements.
WHAT IS A QUALIFIED APPRAISAL SUMMARY?
A “qualified appraisal summary” is a summary of the appraisal which:
- is prepared on the form prescribed by the Internal Revenue Service.
- is signed and dated by the gift recipient.
- is signed and dated by the qualified appraiser who prepared the appraisal.
WHO PAYS THE COST OF THE APPRAISAL?
The donor is responsible for all appraisal fees. These fees cannot be based on a percentage of the appraised value.
HOW MUCH CAN I CLAIM AS AN INCOME TAX DEDUCTION?
You can claim a deduction equal to the fair market value of your vessel subject to limitation. In general, the contribution base for determining the maximum amount you may deduct in a particular year is your gross income. For federal income tax purposes without regard to any net operating loss carry back to that year. Charitable gifts to qualified tax-exempt organization may enable you to claim charitable deductions in an amount up to 50 percent of your contribution base.
MY BOAT BELONGS TO MY CORPORATION. WOULD IT BE ADVANTAGEOUS FOR MY CORPORATION TO CONTRIBUTE THE VESSEL?
The government allows a charitable deduction against a corporation’s taxable income. However, because of the number of alternatives available, the subject of corporate contributions is complex. Consideration must be given to a number of factors, including the profitability of the corporation, the type of corporation, (for example Sub-chapter S), diversity of stock ownership, nature of the corporate assets, and finally, whether the boat has been depreciated. We would be glad to discuss your particular situation with you or your Tax Adviser.
- You will be relieved of the considerable expense of continued boat ownership, including storage, maintenance, insurance and depreciation.
- You will be entitled to claim a charitable deduction on your federal income tax. The Federal Government recognizes that gifts to religious, educational, charitable, scientific and literary organizations have contributed significantly to the welfare of our nation and our tax laws are designed to encourage such giving. You are entitled to take a charitable contribution deduction, subject to certain conditions and limitations and limitations, on your income tax return for genuine gifts of cash or property to qualified organizations.
- You will be helping to support the health of the oceans.
CHARTER BREAKDOWN FOR DONATED VESSELS
- At closing 40%
- Purchase Option Fee: 12.5%
- Security Deposit: 7.5%
- First year of charter: 20%
- After year 1: 2nd year of charter: 20%
- After year 2: 3rd year of charter: 40%
60% of purchase price is financed by SeaKeepers for 3 years with no interest.