The Big Yacht Giveaway

With the economy slowing, it's definitely not a seller's market for people looking to unload their high-priced yachts. So people are giving them away sort of. Following up on their popular car-donation programs, charities such as Goodwill and Volunteers of America, as well as an increasing number of small nonprofits, are accepting boats and yachts, ranging in value from $500 to several million dollars. Volunteers of America alone took in more than 300 boats last year. Walter Cronkite has given two of his vessels to a Florida nonprofit.

While a few nonprofits that run aquatics camps use the boats for their activities, most simply resell them. Often the donation takes the form of a so-called bargain sale: the owner sells the boat to a charity at half its value or less. The difference in price is considered a donation, giving the seller a big tax write-off. The charity then makes money when it resells the boat. The practice has drawn scrutiny from the irs, which has issued new rules to prevent donors from overestimating the value of their cars and boats for the tax benefit. Some charities, too, are concerned that owners are shopping around their boats, looking for the charity that will pay the most.