Is anyone expensing their boat?
04-09-2008, 01:43 PM
#21
Gold Member
Gold Member
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.
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.
I know in Virginia you can submit a form with your receipts for fuel consumed by non-highway vehicles and receive the "road-tax" piece of it back - I believe it is roughly 18.8cents per gallon. Since we are not using the boats ON the road you are entitled to this amount back. The form even has a place for your CG Reg # and Boat name. Don't know how it is in your state but there is NOTHING questionable about that.
04-09-2008, 01:52 PM
#22
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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
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
04-09-2008, 02:27 PM
#23
Gold Member
Gold Member
04-09-2008, 02:28 PM
#24
Just double checking here but you aren't talking about reimbursement for the road tax piece of the gas taxes paid are you?
I know in Virginia you can submit a form with your receipts for fuel consumed by non-highway vehicles and receive the "road-tax" piece of it back - I believe it is roughly 18.8cents per gallon. Since we are not using the boats ON the road you are entitled to this amount back. The form even has a place for your CG Reg # and Boat name. Don't know how it is in your state but there is NOTHING questionable about that.
I know in Virginia you can submit a form with your receipts for fuel consumed by non-highway vehicles and receive the "road-tax" piece of it back - I believe it is roughly 18.8cents per gallon. Since we are not using the boats ON the road you are entitled to this amount back. The form even has a place for your CG Reg # and Boat name. Don't know how it is in your state but there is NOTHING questionable about that.
04-09-2008, 02:31 PM
#25
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.
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.
Also I am amzaed at what people on the forum do for boat insurance. More than 1/2 of them would not be insured if they had a claim.
04-09-2008, 02:38 PM
#26
VIP Member
For every gallon of fuel sold in VA, there is a tax of roughly 17.5 cents per gallon, which goes toward improving the roads and associated infrastructure. Since a boat (or lawnmower, backhoe, skidsteer, etc.) is not using this infrastructure, Virginia gives this tax back to you. However, you must have well documented receipts, and you are always up for review when you turn this form in. It has nothing to do with your state or federal income tax. You can turn this form in at anytime. Each individual receipt must be for more than 5 gallons of fuel. This is the same concept as buying diesel fuel that is dyed for farm or off-road use only. Only you get the money (tax) back after the sale, not at initial purchase.
You can read more about it here:
http://www.dmv.state.va.us/webdoc/citizen/fuel_tax.asp
04-09-2008, 03:12 PM
#28
Member #9
Charter Member
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.
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.
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04-09-2008, 05:48 PM
#29
Registered
I'm no tax guy, but even I know that with my last boat, writing off the interest was a stretch.
Gas/repairs?????
Next time my boat breaks, I'll just sign up for a PR, and write off all the parts and labor to get it ready for the run.
Gee, why didn't I think of that??
I guess because in my opinion it's not only dishonest, but if you are saying you're in a certain PR because you agree with their charitable donation recipient, you aren't donating a thing, you're just looking for someone else to pay for your entertainment.
If that's what you're looking for, there is a much better LEGAL way to do it, find someone to SPONSOR your boat for the season.
There was a guy about 2-3 years ago that had his boat sponsored by Capt. Morgan.
I don't recall how his whole experience with it was - maybe someone can dredge up an old thread...???
04-09-2008, 06:01 PM
#30
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i can't say who but i know a guy who boat the whole boat with a company check and the new trailer to and all the service parts just hope IRS doesn't come for three years thats what he told me
