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Buying a boat for a tax write off questions

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Buying a boat for a tax write off questions

Old 01-07-2015, 08:56 PM
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Last edited by ProppedUp; 02-11-2016 at 06:19 AM.
Old 01-07-2015, 09:00 PM
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Gonna need some more info, but if you think you can set up a shell charter to 'sell' to your business so you can write it off, it ain't gonna happen.
Old 01-07-2015, 09:12 PM
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Originally Posted by ProppedUp View Post
Ok why not? Happens with aircraft all the time.

So I get an LLC buy the boat and pay for everything under that i.e. dock slip, fuel, etc. Then my other company charters it for "company parties".

How is that not possible? If I rent a houseboat this weekend for a company party I can write it off. Why not this?
If the sole customer is his other company, he's got a huge audit risk that he'll most likely lose on the LLC of the boat. They won't recognize it as a legitimate company and he'll be looking at two issues with the IRS.
Old 01-07-2015, 09:17 PM
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The expense is so not worth the risk or the effort.
Old 01-07-2015, 09:30 PM
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My Gheenoe is 100% tax deductible ...

1. I use it to haul pipe with

2. it goes into lakes to change pumps and nozzles


But i bet with your boat you can paint "advertizing" on it and write it off

Remember the "Miss Budweiser" ?

There are all kinds of ways ... portable "warehouse" second "office" etc ... "Research facility"
Old 01-08-2015, 01:36 AM
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It depends on how aggressive you want to get. You could also set up a leasing entity, and lease the boat to your company. Of course, if audited, you would need to prove that your company is paying market rate for a lease on the boat so the expenses just get shifted around. The depreciation on the other had would be nice.

As far as getting your captain's license, I don't think the irs really cares. Instead, I would consider hiring a captain for your company outings. Showing outside expertise was contracted could help your case with the irs when an audit comes. And an audit will more than likely come as this LLC you would create would be a big flag to them. Expect an audit in 3 years or so.

Now, if you can somehow show a true profit motive from the LLC and start paying some taxes in let's say 2 out of 5 years, then go for it.

I'm surprised your accountant is recommending this.

I have two CPAs I deal with. One is from the midwest and told be to do what yours is recommending. The other is from FL and was in the large boat industry for many years, and is saying no way unless you can truly PROVE you were making a sincere run at making a profit, which doesn't sound like you are.
Old 01-08-2015, 04:24 AM
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If you are not in a Charter Fishing business or not using the boat for income production NO WAY IN HELL

It would have to be viable business and yes you would need a Capt Lic to run a charter business. but even that you would have to prove it is a business and not a personal item, not just a couple charters a year

Now if you take clients out of entertainment I could see the expenses that day being deductible but with all the $$$$ you spend for the boat it is going to cost you more than what little that would save for taxes but hell it would be cheaper to take your clients out with an honest charter boat/capt for a fishing trip to me



If it is financed and has livable quarters(sleep, shower, food prep, crapper) then it "could" qualify as second home and the interest would be deductible

I am still scratching my ass wondering what tax person told you that ;?
Old 01-08-2015, 04:58 AM
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let's say the boat is used in "business purposes" of obtaining "reclaimed materials" to make product...how much could be written off?
Old 01-08-2015, 05:05 AM
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Originally Posted by chimmike View Post
let's say the boat is used in "business purposes" of obtaining "reclaimed materials" to make product...how much could be written off?
There again you MIGHT get by with writing all of UNLESS you are audited;?;?

As long as property is MORE than 50% business you can write that portion off plus that much the expenses should be prorated to the percentage you use for business as opposed to personal

Boats are like Race Cars to the IRS, they always look at them as a luxury item unless you are a full time guide or have substantial income compared to expenses for the item in question.

DOCUMENTATION IS THE KEY


I have a client that works for major insurance company as QC for claims but he also does free lance outdoor writing and he keeps impeccable records of his trips(travels the SE and writes for several major outdoor mags) and I have to admit it feels kind of odd some of the stuff we deduct but he is very honest whether it was personal or business. Even times his family goes with him and as long as the MAIN purpose of the trip was for his work we take HIS portion of expenses for the trip. Trust me I have hunted and fished with him MANY times and he is always getting pictures/video for his articles, ALWAYS.

Most would laugh at some of the tricks I have seen him pull for a picture LOL
Old 01-08-2015, 05:21 AM
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What the OP wants to do is tax evasion.
Whether, after he gets caught during an audit, he is prosecuted by the Feds depends upon whether they want to make an example out of him.
A recreational boat on a small lake in Georgia won't pass the laugh test as a commercial venture - on the other hand, a 42' Yellowfin run by a guy in SE Florida who does charters and has a TV show probably would survive an audit.
Old 01-08-2015, 05:32 AM
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Why go thru all of that aggravation to avoid paying taxes.

Just don't pay them, and go off the grid. It'll take years before the nincompoop bureaucrats at the IRS will find you.
Old 01-08-2015, 05:33 AM
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Substance over form. Since you are "leasing" from yourself there is no "in business to make a profit". The second entity that owns the boat would be disregarded. You would have to prove that your boat .. was an ordinary and necessary business expense for your small business...... doubt a 30 foot Searay would fit ...
Old 01-08-2015, 05:40 AM
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You can do anything you want to until you get audited
Old 01-08-2015, 05:40 AM
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Originally Posted by LI32 View Post
What the OP wants to do is tax evasion.
Whether, after he gets caught during an audit, he is prosecuted by the Feds depends upon whether they want to make an example out of him.
A recreational boat on a small lake in Georgia won't pass the laugh test as a commercial venture - on the other hand, a 42' Yellowfin run by a guy in SE Florida who does charters and has a TV show probably would survive an audit.

Bingo, Guess i did not put it as "harsh" as I should have
Old 01-08-2015, 06:35 AM
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I just went through an audit a few months ago for my small business. They were trying to not allow me a 100% write off on my two company trucks that have huge 1'x8' aluminum signs on either side above the pick up bed. They caved somewhat easy but I still was shaking my head WTF did they even try and bring that up.

I do not think you woukd survive an audit well. Just buy a boat that meets the 2nd home exemption and take the deduction.
Old 01-08-2015, 06:54 AM
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I don't think there is a bigger red flag flying over Bejing.
Old 01-08-2015, 07:00 AM
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Please do and get back to us.

Old 01-08-2015, 07:04 AM
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OP- don't outsmart yourself. I own my own business and have boats - I take clients fishing all the time. I also play golf and take clients out all the time. Sure you can write off entertainment a bit but where you are trying to go may set off all the alarms. Not worth it.
Old 01-08-2015, 07:17 AM
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Plenty of poor advice given in this thread.

On the "charter side", losses will generally only be deductible against real income. Hobby loss rules are designed to prevent abuses. Your actual business can deduct legitimate expenses, but you need to actually pay them, and those payments are income to the "charter side". There might be some things you can do that will help reduce the overall tax bite, but if you're not careful, you will essentially be playing the audit lottery. Works for some people.

Get good, practical, professional advice.
Old 01-08-2015, 07:38 AM
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Originally Posted by ProppedUp View Post
Ok so I think I may slip up and get a new boat this year. I want to write it off on taxes and this is what I was told by my tax guy.

I own a small business.

If I buy the boat and park it at the marina the only thing I can write off is actual cost the day of a boating trip like fuel, beer, hot dogs etc.

However according to him if the boat is a "charter boat" than my business can "charter it" and doing it that way I can end up writing off everything, dock, maint., depreciation etc...

So since we have lawyers, accountants, and rocket scientist on here I figured I'd throw it to you guys. I wanna buy a 30 foot Sea Rey cabin cruiser and stick it on a lake in Georgia.

What do I have to do t make it a legal charter boat if it is possible?

I suppose I'll have to get a 6 pack license. Since that is an uninspected passenger vessel license does the boat even need to be inspected?

Do any of you guys do something like this to write it off?

Thanks
Tax evasion is a crime.

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