OK, I sent out a plea amongst our fleet members and potential members to keep a used boat that recently became available for sale within our newly formed sailing fleet.

A potential friend came up with the idea of purchasing the boat and donating it back to our fleet, as he is overseas for work about half of the sailing season, and graciously offers it for use by others while he's not here. He's asked me if we can get this done before 12/31/06, obviously for tax purposes.

This is something that seems intriguing but now I have questions.

1) What are the liabilty issues?

2) We are not currently incorporated (non-profit or otherwise) is it possible to get done quickly?

I have the time to find old 14's and 16's and get them in usable order again (as I did with this particular boat) and had thought about putting any profits directly back in to purchasing more boats or fleet equipment, is doing this non-profit worth the hassle? To me personally it would not amount to any significant tax advantage.

Any horror or otherwise stories regarding "club" boats? Any attornies with comments?

Thanks,

Unless you are incorporated as a 501(c)3 Tax Exempt Organization, donors cannot deduct the value of their donation as a charitable contribution for tax purposes.

When you open your bank account... Somebodies name and SS went along to open the account. Now, The IRS gets to take their cut when that person files taxes,

More importantly... if [censored] hits the fan... That bank account is the start on the unlucky persons personal assets.

Incorporate!!!... Usually the cost is nominal (35 for us 15 years ago). The risk is measurable with a sailboat club.

You can use the regatta and beach liability insurance program after you join US Sailing. (100 bucks)

Depending on how big a program... the cost will be 400 or so and up.

We at Sail Sand Point, www.sailsandpoint.org, are a 501(c)3 non-profit. When we receive a donated boat, our Executive Director sends a letter to the donor that thanks them for the donated boat. If the boat is not going to be used in our program, we advise the donor, and let them know the price we receive when the boat is sold. The donor can then use this figure on their tax deduction. When we are going to use the boat in our programs, we so advise the donor, and it is up to them to determine the value of the boat. This is in accord with the current IRS rules.

So far we have received six Hobie 16's, one Hobie 14, and five Hobie Waves,one used,three new from local Hobie Sailors and other supporting organizations and one new with funds from sale of donated boats not used in our program. The four new Waves, were passed through by our local Hobie Dealer, Hobie Cats Northwest at their cost. BTW, Hobie Cats Northwest has now relocated to Magnuson Park, Seattle, in the same building as Sail Sand Point.
Caleb Tarleton

Thought this may be of interest

Upon further investigation, recieving the 501(c)3 "Charitable" status is not as simple as filing some paperwork and notifying the IRS, and makes me even more appreciative of the countless hours of work behind Sail Sand Point (which we are using as an idealic example).

A group of ppl who get together and decide they want to form a sailing club, have a few club boats for use as part of a membership fee can be considered tax exempt, but as a social (c)7 tax exemption. In order to be charitable, and give boat donors tax write offs, more serious activity along the lines of a true public access facility or a sailing school must be involoved.

Thanks for your input gentlemen.