1. How do I choose a charity to accept the donation of my yacht?
Of the many organizations soliciting donations, only a few have been in existence for more than a few years. American Foundation Funding has the experience and funding necessary to structure your donation properly to secure the greatest tax benefit for you while avoiding pitfalls that could become problems in the future. When choosing an organization, be sure to find out how many successful donations they have completed, and always ask for references from previous donors.
2. Does donating a boat mean "giving it away"?
Absolutely not! Depending on the donors individual tax situation and how the charitable organization uses the donated property, some donors have actually received more bottom line cash benefits from donation vs. outright sale, based on tax credits, cost of ownership relief, and marketing cost savings.
3. Why should I choose American Foundation Funding?
American Foundation Funding has managed hundreds of successful boat donations for clients for over a decade. American Foundation Funding offers extensive experience in structuring donation programs for its long list of clients.
4. Are there any costs involved in donating my boat through American Foundation Funding?
There are no costs involved in donating your property to American Foundation Funding unless your donation is valued in excess of $5,000, in which case a "qualified appraisal" is needed. We can assist you in providing a list of surveyors or appraisers in your area, however, to avoid any potential conflict of interest, we do not choose the surveyor or appraiser for you and cannot pay for that service. You may be able to use an existing survey or valuation provided it is no more than 60 days old. We work with you in every way possible to make the transaction a smooth and pleasant experience.
5. How long does it take to complete a donation?
A donation can be completed in a matter of days. Once Deeds of Gift have been signed and notarized, American Foundation Funding takes over all the responsibilities and worries of ownership. This can be a big plus when you consider the sales process can take as much as a year or more, costing you a considerable amount of money in dockage, insurance and maintenance costs, not to mention the time and occasional frustrations in dealing with prospective buyers, sea trials, etc. You can start to recognize your tax credits against your quarterly estimated tax payments as well.
6. What is the difference between a "donation" and a "bargain sale"?
A "donation" is a contribution in which the donor gives 100% of the property to the charitable organization. A "bargain sale" is when the donor sells part of the property to the organization for cash and donates the remaining amount of the "fair market value". A "bargain sale cash donation" can be arranged in some cases, further optimizing the transaction's benefits to you.
7. What if I want to donate my boat, but I still owe money on it?
In some cases, American Foundation Funding may be willing to structure a "bargain sale" contribution such that the Foundation assumes the existing mortgage and you donate your remaining interest in the vessel.
8. Can I use my yacht broker to handle this for me?
Yes you can; AFF pays the brokerage fees. We have worked effectively with the yacht brokerage community for many years on the donation side of the transaction, with brokers as central agents for the yachts we take into inventory.
9. Are boat donation programs legal?
Yes! American Foundation Funding is a fundraiser for an IRS approved publicly supported non-profit 501(c)(3) corporation and has managed hundreds of charitable yacht and property donations since it was established more than 10 years ago. The "Jobs Creation Act" of 2004 has clarified the guidelines for these donations and made it easier to adhere to the IRS suggested methodology for establishing values and the factors affecting resale timeframes. With the "material improvement" process utilized by AFF, vessels can be resold immediately upon completion of material improvements with no waiting period.
10. What potential problems could come up, and how do I avoid them?
All tax matters are subject to review ("audit") by the IRS, however we have experienced little or no challenge to deductions since the new clarifications of 2004 have been published. We rigorously follow the IRS documentation process for your donation and have the financial strength to perform the material improvements that are required to qualify the yacht donation for immediate resale while protecting it's donation qualification status. This is the reason to work closely with an experienced organization such as American Foundation Funding, as well as your financial advisors.
11. What types of boats make the best donations?
One common misconception is that only older boats and properties are donated to charity. All types of vessels, high sales volume name brands as well as custom built vessels can make good donation candidates. We offer a complementary analysis of each situation's projected benefit to the donor. Some of the best candidates are low volume one of a kind vessels where the appraisal reflects the condition and uniqueness of the yacht.
12. How do I determine "Fair Market Value"?
Donations valued at more than $5,000 must have an appraisal done by a qualified marine surveyor. This appraisal needs to be done at "arms length" from the charity and is the only expense of donation required to be paid for by the donor. Following this procedure meets the IRS guidelines outlined in IRS Publication 561, "Determining the Value of Donated Property". (see Resource Section for complete copy). We can recommend industry appraisers in your area to assist with this process.
13. What do I need to do to start the donation process?
To further explore how you can benefit from donating your boat or property to American Foundation Funding, please call or email us, or you can complete our Donation Inquiry Form. We will review your information, do a preliminary benefit analysis, and respond to you rapidly.