2112

Capital gain or income?

JJONES

If you used it as a rental with a rental co you could.Start a rental company and open a bank account.Have people you know rent it from you for what ever you want and have them pay with check and deposit it into your account but not really let them use it.Give them the money back out of a different account.Use the rental account for all your boating costs,repairs,transport,gas etc.Then you could write off all your expenses.One step better is get a captains license and do the same as a charter co.

Chris Sunkin

The IRS loves it when people f-around with boats. They should just have a box on the form that says "boat owner wishes audit".

If you want to do anything more than deduct mortgage interest, you'd better be 100% clean and legit- or be prepared for audit, back taxes, fines & interest.

wananewboat

I don't know about boats, but "what if" when you sell a truck or car the buyer writes the check out to you and not the company and you cash it at their bank. If the vehicle is completely depreciated and you don't do it often would that help? The check or checks would have to be under $10,000.

Audiofn

Yup that is my understanding of it as well. Unless you are in the marine bus. then you are likely to pull and audit.....

Audiofn

You can depreciate things down to zero if you want. It depends on the guidelines set forth by the IRS as to how fast you can do that. If you sell it as private then you would still have to account for the inventory some how.

FeverMike

Yep 100% true!

Also there was a form on a past thread about being able to write off your gas tax...well I printed this form and took it to my accountant for my business and found out the only way to write off gas and other expenses is for the boat to make money and you have a captain license. He also said this would for sure through a red flag and get you in trouble.
I use my boat as a 2nd home on the weekends. It has a COVERED sleeping quarters, shower, flush out head, sinks and cooking facility's.

The Menace

There is a fine line between tax avoidance and tax evasion.

Audit for Tax Avoidance: Expensive attorneys and accountants trying to explain your justification for the deduction.

Tax Evasion: Expensive attorneys and accountants explaining why it was an innocent oversight on your part. Tax plus penalty.

The government needs money than ever. The Dems get the White House and keep congress the witch hunt will be on for every dollar you can't afford to give up.

seafordguy

My understanding is you can write-off the interest component if you claim the boat as a second residence pursuant to it meeting the very grey requirements of the IRS code surrounding interest paid on Boats, as outlined in Publication 936:

Qualified Home
For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.

The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. Otherwise, it is considered personal interest and is not deductible.

Truthfully, I think the best and safest bet, is to have the boat on an equity line, use the equity line for your boat gas, insurance, etc... and let your cash go elsewhere. Therefore, if you have an equity line that is at prime, or prime minus (mine is prime minus .5), then you are paying 4-5% interest on the line less a net tax effect equivalent to your tax rate - say 30%. At that point you are paying essentially 2.8% interest (4%*(1-.3)), and if you can't use your cash to make more than 2.8% you are doing something wrong. This also lowers your adjusted gross income and hence your tax liabiility.

My .02 - I hate debt, but like it or not, it doesn't hurt to "play" with someone else's money.

Eric

TexomaPowerboater

Unphuckinbelievable what I'm reading. My family has been in the tax business for 30+years. We have never once written off a boat.............maybe the interest expense and thats a stretch.

Gas/repairs for poker runs as charity is retarded. What benefit does a charitable organization receive by you filling up your tank with gas? Wake up people.