donated tug boat

[Bjorn]

An s-corp gave a boat to a museum. What type of tax benefits, if any, do I need to claim for this type of transaction?

Mahalo.
Bjorn

[Davc]

assuming it had been fully depreciated, then they have no deduction.

[jerome]

That's not exactly true. Business property donated to charity may still yield a deduction, even when fully depreciated.

The tax book on page 4-16 says that contributions of property are based on fair market value of the property at the time of the contribution. If the property is ordinary income property, the deduction equals the fair market value minus the amount that would be ordinary income or short-term capital gain if the property were sold.

Obviously if the depreciation recapture exceeds the value of the property at the time of donation, there would be no charitable contribution deduction.

But let’s say the business bought the tug boat back in 1940 for $10,000, and fully depreciated it down to zero. Yet today, the tug boat is an antique worth $100,000. The charitable contribution would equal $90,000 ($100,000 minus $10,000) even though the taxpayer’s adjusted basis in the property is zero.