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The Appraisal

What a Qualified Marine Appraisal Actually Requires

The single most common error in a yacht donation is treating a marine survey as the appraisal. The two are different documents, prepared by different professionals, for different purposes.

First Principle

Survey is not appraisal.

A marine surveyor inspects the vessel and reports on condition, classification status, equipment, and recommended remedies. A qualified value appraiser opines on what the vessel is worth on the open market at a specific date, using a defined methodology, with comparables and assumptions disclosed. A surveyor may also be an appraiser, but only if they hold the appraisal credential and follow the appraisal standard. Most do not.

The Standard

Who qualifies as a “qualified appraiser”.

Treasury Regulation §1.170A-17 defines the standard. In practice the appraiser must:

The 60/90 Window

Timing.

The appraisal must be performed no earlier than sixty days before the date of contribution, and the signed report must be in the donor's hands no later than the due date of the tax return on which the deduction is claimed. Most donors complete the appraisal in the four weeks leading up to closing.

Methodology

The four pillars of a defensible report.

A qualified appraisal that holds up under examination addresses value through four lenses. A report that uses one and ignores the other three is thin.

Process

Who engages the appraiser, and what it costs.

The owner engages the qualified appraiser directly. Not the charity. Not us. IRS regulations require the appraisal to be independent, and a fee paid by the charity creates a conflict that disqualifies the report. We coordinate the timing and the deliverables, but the engagement letter and the fee are between the owner and the appraiser.

Industry rule of thumb is fifteen to twenty-five dollars per foot of overall length, with upward adjustments for complexity, multiple flag jurisdictions, or unusual equipment. For most vessels in the donation range that lands between $2,500 and $10,000. The owner pays this cost — IRS rule — and it is not itself deductible.

Ready When You Are

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Paul@YachtDonations.net

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