A Tax Deduction is an Important Consideration for You When Donating an Airplane to a Charity
If you donate an aircraft to a charitable organization like Giving Center , its Fair Market Value (FMV) must be determined. An acceptable measure of the FMV of a aircraft is an amount not in excess of the price listed in a used aircraft pricing guide for a private party sale, not the dealer retail value, of a similar aircraft. However, the FMV may be less than that amount if the aircraft has engine issues, damage, high airframe hours or any type of excessive wear. The Fair Market Value of a donated aircraft is the same as the price listed in a used aircraft pricing guide for a private party sale only if the guide lists a sales price for an aircraft that is the same make or manufacturer, model and year, sold in the same geographic area, in the same condition, with the same or similar engines, options, systems or accessories, total hours and with the same or similar warranties as the donated aircraft. Your Internal Revenue Service (IRS) tax deduction for a donation to charity airplane generally is limited to the gross proceeds from its sale by the qualified charitable organization such as Giving Center. This rule applies if the claimed value of the donated aircraft is more than $500. In certain cases, you can deduct the aircraft’s FMV. The aircraft appraisal can therefore be used by the entity making the donation to charity and as a selling tool for the Giving Center.
What Is Aircraft Fair Market Value (FMV)?
To figure how much you may deduct for aircraft property that you contribute, you must first determine its Fair Market Value on the date of the contribution. Fair Market Value (FMV) is the price that aircraft property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts. If you put a restriction on the use of property you donate, the FMV must reflect that restriction. If a tax deduction is an important consideration for you when donating an airplane to a charity, you should check out the charity, check the value of your airplane and see what your responsibilities are as a donor.
Qualifying for a Internal Revenue Service (IRS) Tax Deduction – General Information
You can deduct contributions to charity only if you itemize deductions on your Schedule A of Form 1040. You must take into account certain limitations on charitable contribution deductions. For example, your deduction cannot exceed 50% of your adjusted gross income. Other limitations may apply. Publication 526, Charitable Contributions, provides detailed information on claiming deductions and the deduction limits. It also describes the types of organizations that are qualified to receive tax-deductible contributions like Giving Center’s status as a 501(c)3 nonprofit charity.
Determining the Amount You Can Deduct
The following rules on deductibility may apply to donations of qualified aircraft. The amount you may deduct for an aircraft contribution depends upon what the charity does with the vehicle as reported in the written acknowledgment you receive from the charity. Charities typically sell the aircraft that are donated to them. If the charity sells the aircraft, generally your deduction is limited to the gross proceeds from the sale. However, there are certain exceptions, described below.
Written Acknowledgment for Aircraft Contribution Internal Revenue Service (IRS) Deduction of More Than $500.
What the written acknowledgment must contain depends upon what Giving Center does with the aircraft. However, all acknowledgments must contain the following information: •your name and taxpayer identification number, •the aircraft identification number, •the date of the contribution, and one of the following: •a statement that no goods or services were provided by the charity in return for the donation, if that was the case, •a description and good faith estimate of the value of goods or services, if any, that the charity provided in return for the donation, or •a statement that goods or services provided by the charity consisted entirely of intangible religious benefits, if that was the case. Gross Proceeds Limit Applies — Generally, if the charity sells your aircraft, your deduction is limited to the gross proceeds the charity receives from its sale.