Notices

Tax Deduction Question

Old 02-09-2018, 07:04 PM
  #1  
Senior Member
Thread Starter
 
Join Date: Aug 2015
Location: BFE
Posts: 2,979
Received 1,077 Likes on 640 Posts
Default Tax Deduction Question

Since boating/fishing is a hobby can you claim the deduction on your taxes or is the some screwed up hidden rule disallowing boating/fishing.

I forget the maximum allowable decduction, how much is it these days?
Old 02-09-2018, 07:21 PM
  #2  
Admirals Club Admiral's Club Member
 
Join Date: Aug 2017
Location: WI
Posts: 376
Received 1,019 Likes on 493 Posts
Default

Well first off, you can't claim hobbies as a decuction. But if you are earning revenue from taking people fishing (i.e. charters), you can claim the related expenses. If after that, it's considered a hobby, you can only the expenses up to the revenue produced, thereby not being able to claim a loss.

Now if you own a boat with a head and galley, you can claim the interest as a deduction.
Old 02-09-2018, 07:26 PM
  #3  
Senior Member
Thread Starter
 
Join Date: Aug 2015
Location: BFE
Posts: 2,979
Received 1,077 Likes on 640 Posts
Default

I’d have to do some digging but I do believe there is a hobby/credit deductions that can be taken.
Not sure what the parameters are but I do remember reading it years ago and recently heard a story of a tax payer and the IRS getting into it over this particular deduction.
According to the report, the IRS lost the argument.
Old 02-09-2018, 07:30 PM
  #4  
Senior Member
Thread Starter
 
Join Date: Aug 2015
Location: BFE
Posts: 2,979
Received 1,077 Likes on 640 Posts
Default

Ok, your correct.
Looked it up and it currently has to result into a business.

The story I was referring to was about a businessman who apparently collected livestock as a hobby.
Old 02-09-2018, 07:50 PM
  #5  
Admirals Club Admiral's Club Member
 
Join Date: Aug 2009
Location: VA
Posts: 5,970
Received 436 Likes on 272 Posts
Default

Many years ago (like 40/50 years ago) you could claim you had a business and deduct hobby expenses against other income. You could also deduct sales tax, credit card interest, employee travel business expenses, education costs, and there were no income phase outs of other deductions.

When people claim that tax rates were "90% back in the day and we all did fine" they neglect to reveal all these deductions that no longer exist resulted in nobody paying that rate. In fact, effective rates crept up over the years and the actual out of pocket tax has steadily increased. Up until recently, that is.
Old 02-09-2018, 08:58 PM
  #6  
Senior Member
 
crazybeard's Avatar
 
Join Date: Aug 2013
Location: Tropico
Posts: 6,120
Received 1,894 Likes on 1,089 Posts
Default

If you want to get audited, put “boat” on your tax return.
Old 02-09-2018, 09:10 PM
  #7  
Admirals ClubCaptains Club Member Admiral's Club Member
THT sponsor
 
Join Date: Dec 2006
Location: At the floaters . . .
Posts: 9,680
Received 3,314 Likes on 1,561 Posts
Default

Originally Posted by crazybeard View Post
If you want to get audited, put “boat” on your tax return.
Well, I guess it depends
Old 02-09-2018, 09:29 PM
  #8  
Senior Member
Thread Starter
 
Join Date: Aug 2015
Location: BFE
Posts: 2,979
Received 1,077 Likes on 640 Posts
Default

Originally Posted by crazybeard View Post
If you want to get audited, put “boat” on your tax return.
Can I claim the hooker or the pole girls on the boat as a hobby deduction?

Doesn't even phase me any more.
Been there and went through it a few times, seems like the norm now.
Old 02-10-2018, 12:44 AM
  #9  
Admirals Club Admiral's Club Member
 
Join Date: Dec 2007
Location: Lakeville Ma
Posts: 6,043
Received 599 Likes on 329 Posts
Default

Originally Posted by Riptied View Post
Since boating/fishing is a hobby can you claim the deduction on your taxes or is the some screwed up hidden rule disallowing boating/fishing.

I forget the maximum allowable decduction, how much is it these days?
Lol I spend so much on my hobbies hobbies I wish this was true. No such thing unfortunately.
Old 02-10-2018, 04:17 AM
  #10  
Senior Member
 
crazybeard's Avatar
 
Join Date: Aug 2013
Location: Tropico
Posts: 6,120
Received 1,894 Likes on 1,089 Posts
Default

Originally Posted by rbhankins001 View Post
Well, I guess it depends
I was referring to a personal scenario. If you have a business that is fishing or boat tours or rentals, then sure. But if an individual or a company that has nothing to do with that industry tries to deduct a boat, they’re gonna want to come talk to you and ask why. Not a guarantee, but surely much higher risk.
Old 02-10-2018, 04:28 AM
  #11  
Admirals Club Admiral's Club Member
 
Join Date: Mar 2012
Location: CT
Posts: 1,942
Received 426 Likes on 267 Posts
Default

How about a medical expense. It is a an emotional support boat!

Last edited by gundog61; 02-10-2018 at 04:36 AM.
Old 02-10-2018, 04:29 AM
  #12  
Admirals ClubCaptains Club Member Admiral's Club Member
 
Join Date: Oct 2002
Location: anderson, sc
Posts: 19,517
Received 1,507 Likes on 873 Posts
Default

Originally Posted by Riptied View Post
Since boating/fishing is a hobby can you claim the deduction on your taxes or is the some screwed up hidden rule disallowing boating/fishing.

I forget the maximum allowable decduction, how much is it these days?
Not sure what you are asking about a boat on tax return


If you are charter boat capt andfor hire yes. personal no way

interest on boat if it qualifies as second home


Hobby losses are not deductible beyond income
Old 02-10-2018, 04:36 AM
  #13  
Senior Member
 
Join Date: May 2017
Posts: 968
Received 971 Likes on 530 Posts
Default

Hobby expenses, up to the amount of income they generated, were deductible. No income, no deduction. Never been deductible without offsetting income.

With the new tax act for 2018, that's gone.

Unfortunately for people who earn income from hobbies, the TCJA completely eliminates the itemized deduction for hobby expenses, along with all other miscellaneous itemized deductions. The prohibition on deducting these expenses goes into effect for 2018 and continues through 2025. This means that taxpayers will not be able to deduct any expenses they earn from hobbies during these years, but they still have to report and pay tax on any income they earn from a hobby! The deduction is scheduled to return in 2026.

If you make any income with a hobby, you must pay taxes on it, but cannot deduct the expenses. And of course by declaring the income, better make sure you have liability insurance to cover it.
Old 02-10-2018, 08:37 AM
  #14  
Admirals Club Admiral's Club Member
 
Join Date: Nov 2009
Location: Tarpon Springs, FL
Posts: 8,794
Received 4,113 Likes on 2,342 Posts
Default

Originally Posted by Riptied View Post
Ok, your correct.
Looked it up and it currently has to result into a business.

The story I was referring to was about a businessman who apparently collected livestock as a hobby.
Not an accountant but even if he was collecting livestock wouldn't he have the option of selling it at some time and wouldn't that option technically qualify it as a business?

I'm getting into cattle but only as a business plus it's necessary to do something to keep my ag exemption.
Old 02-10-2018, 10:52 AM
  #15  
Senior Member
Thread Starter
 
Join Date: Aug 2015
Location: BFE
Posts: 2,979
Received 1,077 Likes on 640 Posts
Default

Not really sure of all the circumstances which were involved with the “Livestock collecting businessman”.

I do know farmers and ranchers fall into a catagory of different rules/laws which any other business has to adhere to.

E.g., farms “Do not” have to pay OT, all straight time.
Old 02-10-2018, 10:53 AM
  #16  
Senior Member
 
Join Date: Apr 2008
Location: Still in Squawler, MI
Posts: 199
Likes: 0
Received 41 Likes on 31 Posts
Default

Well, I guess it depends
The universal answer to every tax question.
Old 02-10-2018, 04:10 PM
  #17  
Senior Member
 
Join Date: Mar 2013
Location: coastal tx
Posts: 735
Likes: 0
Received 720 Likes on 447 Posts
Default

we have a LLC that holds land and mineral rights.
does this mean that what we spend on the land keeping up fences, brush control, electricity for water well, liability insurance, property taxes etc. will not be able to be deducted from the income of the LLC( which is usually less than the income for grazing lease and mineral intrests) to keep the income down for the partners of the LLC?

Or will the LLC still be able to cross off those against the income before distributing the gain or loss to the partners?

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are On
Refbacks are Off


Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information -

Copyright © 2021 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.