gulfstream aircraft in a banking turn for an aircraft appraisal

gulfsteam aircraft on approach ready for an appraiser

A General Guide for Donation of Aircraft for

Charitable Deductions for Internal Revenue

Service (IRS) Tax Reports

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, its Fair Market Value (FMV) must be determined. AERONUVO, The Aircraft Appraisal and Vauation Company can provide this report and service to you. 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. AERONUVO can provide a fully documented and USPAP compliant aircraft appraisal report for the customer. 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. 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 entitiy making the donation to charity and as a selling tool for the charitable organization.

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.

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 the charity does with the vehicle. 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.

Written Aircraft Appraisal

Your written aircraft appraisal must be from a qualified appraiser such as from AERONUVO. The aircraft appraisal must be made no more than 60 days before you donate the aircraft. You must receive the appraisal from AERONUVO before the due date (including extensions) of the return on which you first claim a deduction for the aircraft. For a deduction first claimed on an amended return, the aircraft appraisal must be received before the date the amended return is filed. When you file your income tax return (Form 1040 or Form 1040X), you will need to complete Section B of Form 8283, and attach it to your return. The Internal Revenue Service (IRS) can answer your tax questions and can provide tax forms, publications, and other reading materials for further assistance. IRS materials are accessible through the Internet at www.irs.gov, through telephone ordering at (800) 829-3676, and at IRS walk-in offices in many areas across the country. The IRS also must make available the charity’s application for tax exemption, determination letter, and Form 990. AERONUVO can deliver a professional opinion and appraisal report of the present market value price on an aircraft, the value on an aircraft to be renovated or modified and the value of an aircraft as a prudent safeguard against excessive tax assessments, capital gains and other taxes. Our Premier and Certified Aircraft Appraisal Services include Aeronca, Aero Commander, American Champion (ACA), American General, Aviat Husky and Pitts, Beechcraft (Beech), Bellanca, Citabria, Cessna, Cirrus, CubCrafters (Cub Crafters), DAHER SOCATA, Diamond, Ercoupe, Glasair, Great Lakes, Grumman American, Lancair, Luscombe, Maule, Mooney, Piper, Rockwell Commander, Stinson and More. AERONUVO is not qualified nor does it provide tax advice or has the necessary expertise to provide legal guidance. AERONUVO, The Aircraft Appraisal and Valuation Company does provide elegible Internal Revenue Service (IRS) qualified aircraft appraisals.

An Aircraft Appraisal Requires

Knowledge, Expertise and

Credibility

An AERONUVO aircraft appraisal is an opinion of value. It is written by a person who has the knowledge, expertise and credibility to determine the value of the subject aircraft. The process of developing an aircraft appraisal is intricate. It is not, as most people assume, the act of looking up an aircraft value in a book or in a computer program. Improper evaluations of aircraft by persons who are not qualified to make them, or by those who have their own agenda in pricing the subject aircraft, lead to trouble for unsuspecting buyers. High aircraft values are far more common than low values. No matter whether you are a buyer, seller, banker, or insurance company executive, you have a major stake in ensuring that the amount paid for the aircraft is reasonable. And how do you know what is reasonable unless an independent, objective, third party examines the aircraft and its records to verify that it is what is expected? The appraisal is an impartial, professional opinion as to the value of the particular aircraft being examined. But it is much more than that. A professional appraisal is a thorough description and inventory of the aircraft that verifies the major selling points for the buyer and financing entity. Never should a salesman's written 'appraisal' be considered valid. An aircraft broker or sales person cannot write an opinion of value on an aircraft he or she is selling. It is a direct conflict of interest.

An Impartial Opinion of Value

An AERONUVO Aircraft Appraisal is an impartial opinion of the value of an aircraft, prepared by experts who know all the factors which make up the current behavior of the used aircraft market. It is an opinion of value based upon experience and repeated analysis of these factors. It is an opinion of value which can be substantiated and justified. It is an opinion of value made by a professional aircraft appraiser.

More On Aircraft Appraisals

AERONUVO provides its customers with our unique and customized aircraft appraisal services at many airports in some instances with no added cost in the states of Virginia (VA), West Virginia (WV), Pennsylvania (PA), Maryland (MD), Delaware (DE), North Carolina (NC) and New Jersey (NJ). Contact us to arrange your consulation today. We are open for business 7 days a week, 7:00 AM to 9:00 PM Eastern Standard Time. As always, our consultations and advice are free with no obligation. It’s all part of our superior aircraft appraisal services.