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© Antares Jet Appraisals, LLC

October 27, 2017

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Aircraft Donation

Why would you donate your aircraft or business jet?

  

 

 

There are a lot of reasons because you may want to donate your aircraft: 

 

  • Market value of the aircraft declined excessively 

  • New regulations put the aircraft out of the market 

  • Aircraft has been on the market too long 

  • Requires excessive investment because of: 

    • The aircraft cannot be flown for mechanical or other reasons and it is too costly to bring to an airworthy condition 

    • An expensive 15-year major inspection is coming soon 

    • Major avionics upgrade required 

    • Expensive engine overhaul 

    • Expensive landing gear overhaul  

 

Additionally, your donated aircraft can get a GREAT TAX DEDUCTION, which is a good incentive for someone who wants to get rid of an aircraft. 

 

You have different institutions where you can give away your aircraft. We have a list of some of these institutions at the end of this article

 

Legal framework 

 

You want to make sure that you are donating your aircraft to an organization in compliance with IRS section 501(c)(3) nonprofit. We recommend you to read the Donor's guide to vehicle donation and the publication 526 charitable contributions; both documents contain useful information to understand the main requirements for donating an aircraft.  

 

It is important to understand that there are some restrictions to the tax deduction of your aircraft donation.  Publication 526 stated that "if you donate a qualified vehicle with a claimed fair market value of more than $500, you can deduct the smaller of: 

 

  • The gross proceeds from the sale of the vehicle by the organization, or 

  • The vehicle's fair market value on the date of the contribution..."   

 

We suggest you have your lawyer or tax advisor help you on this because small details may make the donation complicated and you may get disappointed because the tax deduction is not what you were expecting.  

 

Aircraft appraisal for aircraft donation  

 

Generally, if the claimed deduction for an item or group of similar items of donated property is more than $5,000, you must get a qualified aircraft appraisal made by a qualified appraiser. There are some exceptions where you don’t need an aircraft appraisal but it will depend on the use that the charity will give to your donation. According to publication 561, Determining the Value of Donated Property,  a qualified aircraft appraisal is an appraisal document that:  

 

  • Is made, signed, and dated by a qualified appraiser in accordance with generally accepted appraisal standards,  

  • Meets the relevant requirements of Regulations section 1.170A-13(c)(3) and Notice 2006-96, 2006-46 I.R.B. 902,  

  • Relates to an appraisal made not earlier than 60 days before the date of contribution of the appraised property,  

  • Does not involve a prohibited appraisal fee, and  

  • Includes certain information  

 

Qualified appraiser 

 

Publication 561 state that "a qualified appraiser is an individual who meets all the following requirements: 

 

  1. The individual either:  

    • Has earned an appraisal designation from a recognized professional appraiser organization for demonstrated competency in valuing the type of property being appraised, or  

    • Has met certain minimum education and experience requirements...For property other than real property, the appraiser must have successfully completed college or professional-level coursework relevant to the property being valued, must have at least 2 years of experience in the trade or business of buying, selling, or valuing the type of property being valued, and must fully describe in the appraisal his or her qualifying education and experience.  

  2. The individual regularly prepares appraisals for which he or she is paid.  

  3. The individual demonstrates verifiable education and experience in valuing the type of property being appraised. To do this, the appraiser can make a declaration in the appraisal that, because of his or her background, experience, education, and membership in professional associations, he or she is qualified to make appraisals of the type of property being valued. 

  4. The individual has not been prohibited from practicing before the IRS under section 330(c) of title 31 of the United States Code at any time during the 3-year period ending on the date of the appraisal.

  5. The individual is not an excluded individual.  

 

Can you deduct appraisal fees? 

 

According to publication 526, "You can't deduct as a charitable contribution any fees you pay to find the fair market value of donated property. But you can claim them, subject to the 2% of adjusted gross income limit, as a miscellaneous itemized deduction on Schedule A (Form 1040).      

 

How can we help? 

 

We provide aircraft appraisal services. Call us now or send us an email to discuss the specifics of your case. 

 

Pablo Perez 

Accredited Senior Appraiser, ASA (American Society of Appraisers)  

Comply with USPAP (Uniform Standard of Professional Appraisal Practice

9+ years Business Valuation - Transaction Advisory Services - Ernst & Young 

Pablo@antaresjetappraisals.com 

 

 

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List of museums, charity institutions, non-for-profit and foundations where to donate your aircraft 

 

 

 

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