Choose a charity carefully to avoid future problems
Thinking of a boat donation?
Be sure to choose a charity
with experience and references

oat, yacht and vehicle donations for years have provided a major source of funding for charitable organizations in the U.S. while giving the donor a significant break on their taxes -- in many cases resulting in more bottom line dollars than a conventional sale.

With recent tax law changes, it's particularly important to deal with an established organization experienced in navigating rules so you receive the maximum benefit from your boat donation. Some charitable organizations have folded after the U.S. Congress passed a new tax law that became effective January 1, 2005, tightening the rules governing the size of the deduction that can be claimed by donating a boat to charity.

While many organizations have screamed "foul" over the new rules, experienced organizations such as Pacific Marine Foundation in Washington are skilled in legally getting you the biggest possible deduction.

The revised tax regulations were passed by Congress on October 21, 2004, and signed into law by President Bush a day later. The law has been criticized as favoring corporations and special interest groups at the expense of grass-roots charities such as the American Cancer Society, Volunteers of America, Pacific Marine Foundation and a long list of other groups large and small that have relied heavily on boat donations to raise funds for their projects.

The new tax law changes the amount of the allowable deduction on donated boats to the amount equal to whatever price the charity gets when they resell the item. The current law provides for a “fair market value” deduction as determined by a marine survey, without regard for the boat’s final selling price. The exception to the new law is related to the "holding period" before resale by the charity -- donations held for at least three years by the charity receive a full market value deduction based on survey and not on the eventual selling price.

A professional marine foundation can structure your donation to abide by the three-year hold, giving you the same deduction received under the previous regulations. Bottom Line: a deal not structured properly can result in intense IRS scrutiny, so donating to a solid, established marine charity is particularly important.

Boat donation transactions structured by the professionals at Pacific Marine Foundation create four-way “win” scenarios in which all parties – the boat donor, the charity, the charity’s beneficiaries and the ultimate buyers of the donated boats – benefit. The donor is relieved of the responsibilities of ownership without the nuisance of enduring the sales process; the charity can resell the boat at a good price after the holding period; the charity’s programs receive the needed cash flow; and the ultimate buyer gets a great boat at a great price, too.

The new tax law has forced many of the inexperienced charities to wind down their operations, but the longtime, established organizations are simply changing their approach to accommodate the new playing field, and protecting their donors at the same time.

When it comes to choosing a charity to which you can confidently donate your boat, you'll find a variety, but few can match the track record and professionalism of Pacific Marine Foundation. The organization is very knowledgeable when it comes to structuring transactions for the best possible results both for the donors and for the beneficiaries of their efforts. PMF primarily supports community youth programs.

If you're bouncing around the idea of donating your boat or a classic auto, you’ll want to contact Pacific Marine Foundation. Their professionals have a combined 30 years of experience in managing boat donation programs, and they're in for the long haul. They can get you the biggest possible deduction while at the same time supporting their youth programs. They can be reached by calling toll-free 1-888-443-8262, by e-mail at info@pacificmarine.org or via their web site at www.pacificmarine.org

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