How to Donate an Aircraft to a Nonprofit

You have been flying it for twenty years. You know every quirk, every sound it makes on climbout, every idiosyncrasy of the fuel system. And now you are thinking about what happens to it next.

Selling it is an option. But there is another path — one that gives the aircraft a second life doing work you believe in, and gives you a tax deduction in the process. Donating an aircraft to a qualified nonprofit is one of the most meaningful things a pilot can do with an aircraft they are ready to transition.

This guide covers everything you need to know about how aircraft donations work, what the IRS requires, and how to make sure the donation accomplishes what you intend.

Why Aircraft Donations Are More Common Than You Think

Aircraft donations to nonprofits happen regularly in the aviation community, though they rarely make headlines. Glider clubs receive donated sailplanes. Young Eagles programs receive light trainers. Warbird organizations receive restoration projects. Museums receive aircraft that no longer fly but represent important history.

The motivations vary. Some donors are pilots who can no longer fly and want their aircraft to continue doing good. Some are estates settling the affairs of a deceased pilot. Some are owners who want a significant tax deduction and prefer the aircraft go to a mission they support rather than an anonymous buyer.

In every case, the mechanics of the donation are similar — and understanding them is essential to making the process work cleanly.

Step One: Confirm the Receiving Organization’s Status

An aircraft donation only generates a tax deduction if the receiving organization is a qualified 501(c)(3) public charity. Before you have any further conversations about the aircraft, confirm the organization’s status on the IRS Tax Exempt Organization Search tool at irs.gov. This takes two minutes and protects you from a significant tax problem.

If the organization is a 501(c)(3), request their Employer Identification Number (EIN) for your records. You will need it for the IRS Form 8283 that accompanies your tax return.

Step Two: Get a Qualified Appraisal

This is the step most donors underestimate. For aircraft donations where the claimed deduction exceeds $5,000, the IRS requires a qualified appraisal performed by a qualified appraiser. The appraiser must meet specific IRS standards — they must have credentials, be independent of both the donor and the organization, and perform the appraisal no earlier than 60 days before the donation and no later than the due date of your tax return.

Do not use a dealer estimate, a VREF printout, or a figure you found on Controller.com as your appraisal. These do not meet IRS standards, and the deduction will be disallowed if the IRS examines the return.

Hire an appraiser who is credentialed and experienced with aircraft. The appraisal fee is typically deductible as a miscellaneous itemized expense.

Step Three: Understand How the Deduction Is Calculated

Aircraft donations are subject to rules that changed significantly after tax law reforms in the early 2000s. The deduction available to you depends on what the receiving organization does with the aircraft.

If the organization uses the aircraft directly for its exempt purpose — flying Young Eagles, conducting flight training, using it for transport — you may be able to deduct the fair market value as established by your qualified appraisal.

If the organization sells the aircraft shortly after receiving it, your deduction is generally limited to the gross proceeds from the sale, not the appraised fair market value.

This distinction matters enormously. An aircraft appraised at $80,000 that the organization sells for $55,000 produces a $55,000 deduction, not an $80,000 deduction. Plan accordingly, and have a direct conversation with the receiving organization about their intentions for the aircraft before completing the donation.

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Thinking about donating an aircraft but not sure which organization is the right fit? AviationLegacies.com works with aviation nonprofits that are properly structured to receive aircraft donations and put them to meaningful use. Reach out at aviationlegacies.com/contact.

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Step Four: Handle the FAA Paperwork

An aircraft donation is also an aircraft transfer of ownership. You will need to complete an FAA Bill of Sale (AC Form 8050-2) and the receiving organization will need to file an Aircraft Registration Application (AC Form 8050-1) with the FAA Aircraft Registry in Oklahoma City.

Do not fly the aircraft or allow anyone to fly it between the time the Bill of Sale is signed and the time the new registration is in hand, unless you have addressed the insurance transition carefully. Work with an aviation insurance broker to ensure there is no gap in coverage during the transfer.

Step Five: Complete IRS Form 8283

Form 8283 is the IRS form for noncash charitable contributions over $500. Section B of the form is specifically for contributed property where the claimed deduction exceeds $5,000 — which includes most aircraft.

The form requires your signature, the appraiser’s signature, and the signature of an authorized representative of the receiving organization acknowledging receipt of the property. File it with your federal tax return.

Keep copies of everything: the appraisal, the Bill of Sale, the acknowledgment letter from the receiving organization, the Form 8283, and any correspondence with the organization about how the aircraft will be used.

Step Six: Get the Acknowledgment Letter Right

The IRS requires a contemporaneous written acknowledgment from the receiving organization. This letter must include the date of the contribution, a description of the aircraft (make, model, year, serial number, registration number), a statement of whether the organization provided any goods or services in exchange, and — if the deduction exceeds $500 — information about what the organization intends to do with the aircraft.

This letter is not optional. Without it, the deduction is not valid regardless of how legitimate the donation was.

What Receiving Organizations Need to Know

If you are on the receiving end of an aircraft donation, your obligations are equally specific. You need to have your 501(c)(3) in place, appropriate hull and liability insurance, a written aircraft donation policy, a process for the qualified appraisal, and a plan for the aircraft’s use or disposition.

Organizations that are not prepared to receive aircraft donations can inadvertently harm the donor’s tax situation and expose themselves to liability. The time to build the infrastructure is before the first donor calls.

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Aircraft donations are one of the most powerful tools in aviation philanthropy. Done correctly, they transfer a significant asset to a mission that needs it, provide the donor with meaningful tax relief, and keep aircraft flying in service of communities that benefit from them.

Whether you are considering donating or building an organization that is ready to receive donations, the team at AviationLegacies.com can help you navigate the process. Reach out at aviationlegacies.com/contact.

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Frequently Asked Questions

Can I donate an aircraft that is not currently airworthy? Yes. A non-airworthy aircraft can be donated, but the qualified appraisal must reflect its actual condition. An organization that plans to restore the aircraft may value it as a restoration project rather than at its airworthy market value. The same IRS rules apply regardless of condition.

Do I owe capital gains tax when I donate an aircraft? Generally no. If you donate the aircraft directly to a 501(c)(3) rather than selling it, there is no capital gains event on the transfer. The tax benefit comes in the form of the charitable deduction, not the avoidance of gain. Consult your tax advisor for guidance specific to your situation.

Can a trust or estate donate an aircraft to a nonprofit? Yes. Estates and trusts can donate aircraft to qualified nonprofits, and the estate or trust may be entitled to a charitable deduction depending on the terms of the governing document and applicable tax rules. This is an area where estate counsel is particularly valuable.

How do I find a qualified aircraft appraiser? Look for appraisers who are members of the American Society of Appraisers or the International Society of Appraisers with specific experience in aviation. Your EAA chapter, local flying club, or aviation attorney can often provide referrals to appraisers they have worked with on previous donations.

What happens if the receiving organization sells the aircraft shortly after I donate it? If the organization sells the aircraft within three years of the donation, they are required to file IRS Form 8282 reporting the gross proceeds from the sale. Your deduction in that case is generally limited to those gross proceeds rather than the appraised fair market value. This is why the conversation about intended use matters so much before the donation is complete.