Aircraft Donation Guide

Throughout life, you’ll find that previous assets purchased might benefit you in some way in the near future, so you’ll hold on to them. Sometimes, these assets need to go. They have been depreciated through your business, become obsolete and more… The asset we’re referring to, in this case, is an aircraft.

Aircraft donation is what charity in the modern world looks like. It is an “in-kind” charitable donation. It’s the act of donating your aircraft to charity, instead of storing it in a hangar, paying fees each month, mechanical upkeep, insurance, inspections, or just watching it collect dust.

That single or multi-engine prop plane, or any aircraft really that you own, now has the possibility of benefiting those in need in greater ways than you could have ever imagined.

Has your aircraft’s market value substantially decreased? Is it currently AOG? Has it been on the market for over six months with still no interest? Are there any major inspections coming up? Or, are you just sick and tired of increasing repair costs?

If you answered yes to any of the questions asked, then you may want to consider donating your aircraft.

In addition to doing good in the world, you are also able to receive powerful benefits with your aircraft donation by receiving a huge tax deduction!

So, if you’re upgrading to another model, experiencing issues, or your days of flying are over, aircraft donation is sure to lessen the turbulence ahead.

In most cases, our charitable organization accepts almost any type of aircraft. The most common types of donated aircrafts are:

Single Engine Prop Plane – An aircraft that uses a single-engine prop as the primary power source.
Multi-Engine Prop Plane – An aircraft powered by 2+ engines as the main power source.
Jet Engine Aircraft – Powered by one or more jet engine turbines. Usually utilized as a business or private jet.
Seaplane/Amphibious Aircraft – Skippers of both sea and sky!
Classic Aircraft – Classic is timeless, flight plans are not.
Ultralight Aircraft – A lightweight plane but a heavyweight contribution to charity.
Helicopter – Your whirlybird can do so much when it comes to natural disasters!
Experimental Aircraft – Usually one built from scratch. Are you ready to unleash your invention to the world and help the less fortunate?
Aircraft Parts / Tools – Our charity usually accepts all aircraft parts and tools. However, you should inquire just to make sure!

This all depends on the type of charitable organization you decide to give your donated aircraft to. In most cases, the charity may sell the aircraft, as they find that the money gained can be better spent elsewhere. This is, of course, not ideal as donated assets would be of better use repurposed in the furtherance of a charitable purpose.

Some charities may even repair and refurbish your aircraft, if it makes economic sense.

This means that the resale price of your old aircraft is maximized, allowing you to claim the highest possible Fair Market Value tax deduction allowed by the IRS.

Bear in mind that if your donated plane is not appropriate for use in the field, it is still incredibly valuable to a charity’s mission.

In most cases, they will sell it and use the proceeds to fund programming that changes and saves lives around the world. There are ways to do this that most charitable organizations choose NOT to do, such as:
1. Retention and utilization of specialized aircraft and Unmanned Aircraft Systems (UAS), and
2. Termed leases of aircraft to meet the IRS significant intervening use requirements.

There are a few other ways, however the two outlined above are the most common. Certain stipulations may be agreed upon prior to donation to preserve the aircraft donation deduction value. It is your right to do so and should be encouraged by the non-profit.

In order for your donation to be utilized, you must ensure that the charity you choose is able to handle the aircraft donation. The best way is to research their history in the industry. Due to liability issues, stay clear of those with little to no experience in the industry.

Do your research and ask the right questions.

See how long they have accepted donated aircraft, any issues they may have had with the FAA, etc., if they have an in-house expert, and if they’re able to fix the aircraft should anything happen to it. Verify any licensure of their “expert” (pilots license, time in the industry, etc.) Search Airmen Certificate Information through the FAA’s website.

Your donated aircraft can play a big part in helping those unfortunate enough to have experienced natural disasters like earthquakes, hurricanes, etc., as well as victims of domestic violence, those suffering from catastrophic illness, and can even be used for educational purposes.
You will no longer have to pay expensive overhauls or annual inspections.
No need to hire an aircraft broker and wait months for it to sell.
You can stop paying expensive hanger fees, aircraft insurance, and any other costs related to the upkeep or storage of your aircraft.
Your aircraft donation can provide significant tax benefits for you. These benefits may also be factored out over a period of 5 years.
Enjoy the peace of mind that comes with the fact that your plane is out there making a difference in the lives of others!

The Internal Revenue Service (IRS) tax deduction from a donation of charity airplane generally is limited to the gross proceeds from its sale by the qualified charitable organization, if the charity sells the plane. This rule applies if the claimed value of the donated aircraft is more than $500. Which, let’s face it, it’s an easy value to meet with an aircraft donation of any kind.

It’s important to get your highest deduction, which means you must work with an organization that:

Has the expertise to get a high sales price. If the organization doesn’t have any pilots, for instance, they might not know how to handle the aircraft and might have to “dump” the plane – costing you the donation deduction you deserve. Confirm their pilots “expertise” by looking up their certification with the FAA.
Can control any repair costs. Almost every aircraft needs something done to it. Since your donation is based on the “proceeds” (net profit from the sale of the aircraft), controlling costs is important. Relationships with qualified aviation mechanics and other industry professionals is essential.
Really cares about every donation. Large “referral charities” or third party companies that sell donations for others often just sell as quickly as possible. Look for a charity where you’re talking to the people who actually serve the people the charity serves and that really care about this particular donation. That is not to say that organizations who assist other charities are not a good cause. Many, such as the Giving Center and Aircraftdonation.org specialize in this type of thing. An “in-kind” donation can often be put back into use in a charitable program.

In certain cases, you can deduct the aircraft’s FMV. The aircraft appraisal can therefore be used by the entity making the donation to charity and as a selling tool for the charitable organization.

It’s important to bear in mind that the Fair Market Value may be less than the amount expected if the aircraft has engine issues, damage, high airframe hours, or any type of excessive wear.

Do not be fooled by charitable organizations with no experience! Fair Market Value of a donated aircraft, in very few, if any cases, will amount to the same as the price listed in a used aircraft pricing guide for a private party sale.

Fair Market Value relates to the price that your aircraft donation would sell for within the open market. Basically, the price agreed between a buyer and a seller.

When it comes to the IRS, your tax deduction for an aircraft donation is generally limited to the gross proceeds from its sale by the charitable organization of your choice. However, this rule only applies if the claimed value of the donated aircraft amounts to more than $500. You’re only able to claim a tax deduction for a donated aircraft if you itemize the deductions on your Schedule A of Form 1040.

Remember to take into account certain limitations on charitable contribution deductions.

One example of this is that your deduction cannot exceed 50% of your adjusted gross income. If a tax deduction is your motive, then you should check out your chosen charity, the value of your airplane, and see what your responsibilities are as a donor.

The amount deducted on an aircraft donation depends on what the charity chooses to do with it. You’ll find this reported in the written acknowledgment you receive from the charity.

As we mentioned earlier, donated aircrafts are typically sold, so in that case, your tax deduction would be limited to the gross proceeds of the sale. Keep in mind, there are certain exceptions to this rule.

The initial written acknowledgment that is required to be given by law itself does not need to contain what the charity chooses to do with the donated aircraft, but all acknowledgments must contain the following information:

Donor’s full name
The name of the charitable organization
Tax ID number of the organization (In most cases, you should never be asked to provide your social security number to any charity)
Aircraft ID number
Date of contribution
A statement that no goods or services were provided by the charity in return for the donation (only if that was the case).

An aircraft appraisal refers to the impartial opinion of the value of an aircraft. This can only be completed by experts who know all of the factors which make up the behavior of the current used aircraft market. This opinion is based upon years of experience and repeated analysis of market factors. It can be substantiated, and justified.

Professional aircraft appraisers must acquire every single fact about your aircraft during the aircraft appraisal process. They will thoroughly examine the aircraft’s logbooks, inspect its interior along with its exterior, and pay close attention to the present condition and maintenance history of the aircraft.

Aircraft appraisals must be made no more than 60 days before your aircraft donation. Remember, when you file your income tax return (Form 1040 or Form 1040X), the appraiser will need to complete Section B of Form 8283 and you must attach it to your return.

This whole process can be daunting and confusing, but we are here to help. So, if you have any further questions, or if there is anything you didn’t understand, make sure to ask the questions to your chosen charitable organization, or ask tax questions to the IRS or your tax preparer.

You can find a lot of information about donations through Publication 4302 (how vehicle donations work) and Publication 561 (determines the value of donations).

Certified aircraft appraisers are appraisers certified by the Professional Aircraft Appraisal Organization (PAAO) write reports that conform to the Uniform Standards of Professional Appraisal Practice (USPAP) when that level of service is requested. All turbine aircraft are appraised to USPAP standards. A USPAP certified appraisal is generally required by the I.R.S. for a charitable donation of any aircraft.

Uniform Standards of Professional Appraisal Practice (USPAP) can be considered the quality control standards applicable for appraisal analysis and reports in the United States and its territories. USPAP, as it is commonly known, was first developed in the 1980s by a joint committee representing the major U.S. and Canadian appraisal organizations.

The Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) authorized the Appraisal Subcommittee (ASC), which is made up of representatives of the leading U.S. government agencies and non-governmental organizations empowered to oversee the U.S. mortgage and banking system. The ASC provides oversight to TAF.

TAF carries out its work through two divisions – the Appraisal Standards Board (ASB) and the Appraiser Qualifications Board (AQB). The latter group sets forth minimum qualifications for appraisal licensure, and its work has been adopted by all states and territories. The ASB maintains USPAP, and issues updates in January of even numbered years.

All US states and territories require appraisal licensure for valuation work performed for federally regulated institutions; however, 35 states and territories of the US require appraisal licensure for all valuation work performed, whether federally regulated or for other use.

Since 2006, USPAP has been updated in a 2-year cycle, which begins on January 1 of even number years. The current version of USPAP is available at www.appraisalfoundation.org and has an effective date of January 1, 2020.

Recognized by –

Financial institutions, IRS, U.S. Customs, judicial systems and taxing authorities recognize, and request PAAO appraisal reports.

Before choosing a charitable organization to participate in an aircraft donation, you should always make sure they are who they say they are, and their purpose is true. Believe it or not, there are some people out there that claim to be a charity, but in reality, they are just businesses that give very little money to the charity themselves.

You’ll have to ensure that the chosen charitable organization is a 501(c)3 nonprofit, that they’ve earned the trust of their donors through financial transparency, and that you’re able to receive financial documents and donor policies when requested.

Another thing to keep in mind is the size of the charitable organizations themselves. Smaller charities are more likely to maximize the amount of your donation, but might struggle to handle the aircraft donation itself. However, there are some out there, like Giving Center and Aircraftdonation.org, that have the experience and experts behind them to support them throughout certain donations and situations.

We are not a for-profit middleman or third-party donation site – we are the actual non-profit. We have decades of combined experience and the most experience in assisting you in making the donation process more beneficial to you as a donor, and to those receiving the benefit of your generous gift. We use the proceeds to change peoples lives!

The final step in the donation process is the pick-up. We gladly bear all expenses for picking up an aircraft when needed and always arrange a pick-up time that will be convenient for the donor.

We are here to help you make a difference!

Ready to donate? Just follow this link to get started Donate Aircraft or call us anytime (888)-228-7320