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Question on the sale of a boat

Old 12-29-2006, 07:28 PM
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Default Question on the sale of a boat

If you bought a boat for $100k and put down $25k with a loan for $75k and sold the boat 4 years later for $80k would you be required to pay any fed income tax on the sale of the boat? The payoff of the loan was $65k so there was a net of 15k of equity. Does it matter if you roll the equity into another boat?

Anyone know the real tax rules?
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Old 12-29-2006, 08:05 PM
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Default Re: Question on the sale of a boat

Looks to me like you have a 20K loss on the boat. Equity is not the same as a gain. There is no income to tax I would think.
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Old 12-29-2006, 09:55 PM
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Default RE: Question on the sale of a boat

"C" Quest - 12/29/2006 7:28 PM

so there was a net of 15k of equity.

Anyone know the real tax rules?
That must be a magic boat. Depreciation will hit you hard in such a short time
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Old 12-30-2006, 08:27 AM
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Default RE: Question on the sale of a boat

No tax if for personal use. You have a $20K loss. There are other issues if the boat is used for commercial purposes.
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Old 12-30-2006, 08:45 AM
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Default RE: Question on the sale of a boat

A $20k loss for you, but only if you DIDN'T
have any fun for 4 years!

You do have a little down payment $$ for
your NEW boat!
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Old 12-30-2006, 11:32 AM
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Default RE: Question on the sale of a boat

There is no tax owed as you have a $20k loss, and you don't pay taxes on a loss.

In fact you basically will always have a loss on a boat, because its not just purchase price. You did put electronics on it, right? And you DID rig it, right? All those costs are expenses and go into your basis. So does the sales tax you pay.

Basically, anything other than gas, oil and maintenance counts towards basis. Replace a bait pump? That goes into the basis - the pump stays with the boat when sold.

Unless its a business venture of some kind you can't take a deduction on a loss, so there's no tax BENEFIT either.
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Old 12-30-2006, 07:31 PM
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Default RE: Question on the sale of a boat

I thought that was the case.... Thanks Guys.

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