Living Aboard

Your Home, Your Houseboat, Your Tax Haven

Published online: Jan 09, 2014 Feature James Martin - goeurope.about.com
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By Janet Groene, with Gordon Groene

Take your houseboat to a state park marina and live onboard for two weeks while helping with a trail cleanup. Volunteer your houseboat to take Sea Scouts out to get their navigation training. Use your houseboat for business entertaining.

These and other activities can turn your houseboat into a partial tax deduction. Get the advice of a qualified tax expert first, to make sure you get the right documentation and don't run afoul of tax codes. If you want to donate your houseboat to a charity, that will simply get it off your hands in exchange for a tax receipt and even more homework is required.  

We've all seen those heart-tugging TV ads and heard catchy radio jingles asking for money, a car or a boat to benefit a good cause. Don't be too sure. Charity watchdogs say that less than a third of Americans look beyond clever sound bites, so they continue to support charities whose executives make huge salaries, spend lavishly on ads and give only a pittance to the cause. 

In some cases, funds even support activities that conflict with your personal beliefs. Worst of all, your tax deduction could be denied.

The good news is that the boat market is slowly coming back. You may be able to sell the houseboat for more than you thought. If donating is still your preference, here's how. To meet the Code of Federal Regulations charities must:

* Reveal the percentage spent on fund-raising and administrative costs. This comes from the charity's 990 report to the IRS. Keep digging until you know exactly who benefits, where and how much. What cancer research, where? What children benefit, where? Exactly how are they helped?

* Undergo an annual audit by an independent certified public accountant using generally accepted auditing standards. Local organizations must also be audited annually unless their income is less than $100,000.    

* Prepare an annual report to the IRS. Known as 990s, these reports include extensive information about an organization's income and expenses, including what it pays its five top officials. (Again, this information isn't easy for donors to find.)

* Document health and human benefits it provided during the previous year. National organizations must provide services or benefits in at least 15 states.

* Be recognized by the IRS as a 501(c) (3) public charity. These c-3s must meet several standards and must not spend any money on partisan political activity. (Lobbying and some forms of advocacy are allowed.)

* Have an active, responsible governing body including a board of directors, none of whom has a conflict of interest and most of whom serve without compensation.

* Must be truthful and non-deceptive in how it promotes itself, making no exaggerated or misleading claims. An organization's promotion must be based upon its actual program and operations. (Some well-known charities are under investigation by one or more state attorneys general for violating this rule, yet they continue to advertise.)

* Use donations for the announced purposes of the charitable organization. For instance, a charity can't raise money for hurricane relief and then use it to support a different program elsewhere.

* Must prohibit sale or lease of the names of its contributors.

* Must demonstrate a substantial local presence to qualify as a local charity. This means having a staffed facility with a physical office where the public can seek services or benefits. To qualify as a statewide organization, an organization must have a presence in at least 30 percent of a state's geographic areas or benefit 30 percent of the state's population.

Meeting the above requirements means only that the charity is tax deductible. Do a search for "donate+ boat" and many charity names appear. Then, to learn the true story, check two or more of these sources: CharityNavigator.org, Guidestar.org and CharityWatch.org.

 

About the Authors

"Living Aboard" is a recurring column that focuses on living on your houseboat. Gordon and Janet Groene lived full-time on the go for ten years and they hold the NMMA Directors Award for boating journalism. Their books include Living Aboard and Creating Comfort Afloat. Janet posts new galley recipes weekly at www.BoatCook.blogspot.com.

 


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