TAX BENEFIT INFORMATION:


The Classic Yacht Foundation is an IRS 501(c)(3) approved (pending) non-profit charitable corporation, which is funded by boat donations, and financial contributions. A boat donation or financial contribution is tax deductible to the extent that it exceeds the fair market value of any premium or service you receive in return. Donating your boat to the Classic Yacht Foundation creates a significant tax advantages to you, because you can deduct 100 percent of the appraised value of your donation. You can apply this tax savings up to 50 percent of your adjusted gross income annually, with a five year carry forward for any remaining balance not immediately deducted.

As a 501(C)(3) non-profit charitable organization, Classic Yacht Foundation is eligible to receive donations that are tax deductible for donors. Our status allows up to 50% of the donor's annual income to be deducted in a given year. Many other organizations may only allow 20% to 30%.

A certain number of boats will be designated for use in Classic Yacht Foundation's restoration programs, and will be materially improved by Classic Yacht Foundation prior to actual use or eventual sale of the boat. In this case, the donor will receive an "Acceptance of Gift" stating our intended use of the boat and the planned duration or the specific material improvements that will be made. The Classic Yacht Foundation will 'Certify the Use' of the boat and forward IRS form 1098-C along with copies of the original documents, and an Acknowledgment letter to the donor to use when filing their taxes.

Some of the donated boats are sold and the proceeds are paid to charitable organizations with related non-profit programs . These donors will be provided an "Acceptance of Gift" stating our intention to sell the boat and, within 30 days of the sale, the donor and the IRS will each receive a copy of IRS Form 8282 stating the gross proceeds received by Classic Yacht Foundation. Your charitable deduction cannot exceed the gross proceeds from the sale. Classic Yacht Foundation will make every attempt to receive the highest amount possible for the boat while also considering the timeliness of the sale.

The Classic Yacht Foundation sells boats by direct advertising in related boating publications, and on the Classic Yacht Foundation web site, with links to other related web sites, and by using established yacht brokers. The types of sale are cash, lease/ purchase option, and bargain sale option.

Changes to the tax laws were embedded into the "American Jobs Creation Act of 2004" and became effective January 1, 2005. These changes, which pertain specifically to the donation of boats have generalized guidelines and rules. The IRS is in the process of writing the details and exact interpretation of the law, but the current guidelines are straight forward.

Owners of boats valued at $500 or less will be provided with an "Acceptance of Gift" which includes a complete description of the boat and the value of the donation. For boats valued over $500, the amount of your deduction will depend on how Classic Yacht Foundation intends to use the boat.


When a boat is valued between $500 and $5,000, a "qualified appraisal" is not a requirement when the Classic Yacht Foundation decides to use the boat in its training programs or to materially improve it, but a "Fair Market Value" must be established. This value can be based on various publications stating marine values, comparable of recent sales, or similar boats for sale in the market. All values must be adjusted for physical condition, location, upgrades, or special equipment included on the boat.

Owners of boats used in our programs that are valued at more than $5,000 will need to obtain a Donation Appraisal from a qualified Independent Marine Appraiser (at the owner's expenses in accordance with IRS Regulations) in order to substantiate the value of the boat. This is part of the official documentation required by the IRS for the donor's tax deduction.

The "Total Appraised Value" is reported to IRS on Form 8283 with the donor's tax return. It is signed by the Independent Appraiser under the Declaration of Appraiser section which defines his responsibilities and liabilities as an appraiser. Classic Yacht Foundation also signs Form 8283 under the Donee Acknowledgment section which defines our responsibilities in disposing of the donated property.

An "Acceptance of Gift" from Classic Yacht Foundation and the signed IRS Form 8283 must be included with the donor's tax return to IRS in order to obtain the tax deduction. If the boat is valued between $5,000 and $500,000, the appraisal is required to be kept in your personal files in order to substantiate your deduction. When the boat is valued at $500,000 or more, the "qualified appraisal" must be attached to the income tax return when filed. All or part of the tax deduction, up to 50% of the donor's income, may be used in the year the boat was donated or it may be carried over for up to five years.

See the IRS publication 526 Charitable Contributions for the complete details of the tax benefit for you. This publication is available on the IRS web site: www.IRS.gov. The Classic Yacht Foundation recommends that you consult with your personal tax specialist, financial planner, or attorney for advise on how to best take advantage of this tax benefit.