When a boat is donated to BIMF, the owner is eligible to receive the full appraised value as a charitable deduction on their income taxes.
The deduction has some limitations in that BIMF must keep the title to the donated boat for a minimum of three years for the donor to receive a credit for the appraised value on their tax return. BIMF then charters the boat for that three year period, with all the charter payments being credited to an agreed upfront purchase price. In essence, it’s just as if the charterer owned the boat with full responsibility for all expenses.
Charter payments can be structured monthly, quarterly, annually, or paid in full at the beginning of the charter. Because the purchase price is established based on a three year depreciation schedule, it usually is established at something less than the current market value.
The charterer does have the option to not purchase the boat at the end of the three years and can simply give the boat back to BIMF with no termination fees.
For more information, please contact us by email, or call us at (401) 842-0752.
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