If you see a van marked IRS at a cemetery, and they are pulling jewelry off a corpse, you now know why. If you want to "rest in peace", don't expense your boat! :D:D

Michael

So Budwiser boat is not a write off i suppose or the bush poker run boat is not a write off or the mercedez boat either.

I didn't reem you out. I stated that when I visited my accountant he looked over the form and said you can not write off fuel expense or the tax on the fuel unless you make money with your boat and to do that you have to have a captians license. That is the legal way to do it. You can fudge it all up but it is not worth the chance.

Here is the thread:
http://www.offshoreonly.com/forums/s...t=gas+tax+form

I can write off the boat interest as a 2nd home because it qualify's and all my boats have since 1997 . I can not write off the sales tax from the fuel I put in my boat because I am not a licensed captain using my boat for business. Taking a customer for a boat ride does not count either.

If you have a legitimate business purpose for the boat and can defend it, you can likely legitimately deduct some or all of the expenses and depreciate the boat itself. Owning a parasail company is a good example. If you sneak a girlfriend out on the weekends, the IRS isn't going to notice. If you set up a phony parasailing company and have no revenues, you're going to get caught.

Racing sponsorship of a boat for the purposes of advertising are perfectly legitimate, provided you can prove that legitimacy. Essentailly, the sponsor must be itself a legitimate business and the raging team also a legitimate business or used purely as an advertising vehicle for the parent business. I have a friend who owns a MCI coach for his business. He takes clients all over on it- trade shows, plant visits, etc. When he uses it personally, he enters into a written rental contract at a reasonable market rate between himself and the corporation- and writes a check. That's audit-proof.

Using a boat as a part of the display and promotion of your product is perfectly legitimate as well. Again, the test is that the connection is legitimate. If I sold boat parts and needed to demonstrate them, I could use the boat as a business expense. You'd have to keep records on the boat's use and the customers you demonstated the products for and most importantly, you'd have to show revenues. On the other hand, if I owned a company that made ice cube trays, I couldn't depreciate and expense a 63' Hatteras just because my trays were in the galley fridge.

The IRS long ago established that a boat may be considered a second home provided it meets several tests of "liveability". Some people stretch them, sometimes pretty far. You may have to someday take an IRS examiner on board your boat and show him how you meet those tests. He can either say "OK" or "no, you owe us these taxes, interest and fines" and you're welcome to litigate.

As far as fuel taxes, that's a state highway tax- has nothing to do with the IRS. All states have their own rules- some will allow you to apply for and receive a refund, some don't.

If Anheuser Busch purchases a boat and uses it for the marketing of their product, that's certainly a legitimate marketing expense. If a couple of VP's take it out trolling for babes on weekends, that use is not- unless the corporation books that use as an employee benefit or bonus and places the value of that usage and attendant expenses into the employee's taxable income. Then the employee is responsible to pay income tax.

If you purchase a boat and can get someone to pay to put that logo on the side and you use the boat to advertise for them, you could certainly deduct your expenses. Now, if you're writing off $10 grand in depreciation a year and expensing another 10 in fuel and maintenance and you show income from your ad client of $500, you're going to have a tax problem.

Mis-communication. We are talking about two different things. Writing off for federal income tax purposes as if the boat is being used as a function of a business entity, and a reimbursement through the Division of Motor Vehicles.

Our reimbursement through the DMV is not questionable at all. Unfortunately I have never taken advantage of it, but still - not questionable at all.

So, the occasional boat trip out with clients (I'm talking 3 or 4 times a summer) and classifying that as "Meals and Entertainment" shouldn't raise a flag? I don't expense the boat or anything about it (maintenance etc). However, we do take some clients/friends out on the boat several times each year for food and drinks. Usually pay for the fuel with the business CC.

That I woudn't worry about. Records are everything- keep a detailed log of the activity and you'll unlikely be questioned.

Tax Return + Boat = AUDIT.

thank you Chris, that was my whole point. My company owns the boat, but I pay for all the extras...but as usual the experts behind the keyboard know more than anyone...:rolleyes:

Understandably I didn have time to address every issue brought up on this thread, but I will be happy to after 4/15. "Its a stretch" meaning not all boats may not qualify. Not everybody has a go-fast with a sink, bed, and toilet. I don't have any problem with deducting the interest on a 30ft+ boat with sink and toilet. Its the smaller ones I was referring to being a stretch. Sorry for the confusion.

I expected to get blasted after my post and I appreciate the other members backing me up. There are legitimate reasons to write off a boat via an actual business being ran with a boat (charter, OSO - lucky bastard, tow boat, etc)

I've just finished reading this thread and agree with alot of the comments that people have said that go along the lines of "Are you fuking kidding me?"

As a CPA myself, I only have the balls to deduct the interest I pay as my vacation home.

For the average Joe, I wouldnt dream of trying to deduct any more.

For the not so average Joe's where the boat has a bona fide business purpose...thats another story all together.

Could you deduct the interest of the loan as a 2nd home if you have a 32ft center console with no cuddy but a head, and sink in the console? Would the IRS believe you just throw out a sleeping bag under the stars on the bow?

I didn't mean to piss you off. I asked the original question to get opinions and experiences. My gas is expensed because I own two business that both have a huge fuel bill and to fill my boat is just a small drop in a bucket. Are you telling me that the entrace fee to a poker run for charity isn't a charitable contribution? I am very interested in hearing your professional opinion, however there are a lot of other intelligent opinions here and I'm sure that none of us want to be called retarded. You have a valuable professional opinion that should be heard, however choose your words carefully. They can sink ships, and also damage respect as a professional. Thanks for your input.

I am a CPA but by no means a tax guro. This whole area is really grey in my opinion. I dont think there is an exact yes or no. Like I said, I deduct the interest on my boat as a vacation home. I have a bed, head, and a Galley.

My head is pump out. If it wasnt it would basically be a bucket in a hole in the floor. Would that still make it a head?

My galley is a sink with pressure water and a microwave. Does that count?

My point is that the rules state (in about as much detail) a vacation home qualifies if it has a bed, head, and galley for cooking.

If you get audited, I would guess it is up to the auditor to make a judgement on if they qualify or not. If you do not have a fixed bed, it may be a bit more difficult to plead your case...Likewise if the galley consists of only a sink.

Agreed. Our profession has been tainted enough by Enrons, A&A's and the like. We used to be a self regulated industry but a few bad azzholes (sorry I meant apples) spoiled the bunch.

Please recognize that while most firms that prep taxes are CPA firms, it is not a requirement. Any Joe can go open up a 1040 shop and prep tax returns all day.
My point..There is a HUGE difference between an accountant/CPA and a tax preparer.


If a client asked me that question I would likely say that yes the entrance fee can be a charatible cont. if it is for a qualified organization and you are given receipt of such. But NOTHING else.

Similiar if you bought a ticket to go to a Red Cross Benefit dinner. The ticket would be a contribution but not your gas to get there, the tux, (a hooker if you couldnt find a date), etc, etc.

There are other limits, rules, and "If then's" but I hope you get my jist. And again, this is not meant to be tax advice....Only my opinion to a hypothetical situation.

It's funny how in your very opinionated thread you gave the obvious perception you and your family were in the tax business. Now in this post you got an opinion from "your accountant". Y know something? My dad was in the freight business for over 50 years. That doesn't make me an expert. Next time I would love to hear your personal opinion, please don't try to give the perception it's a professional opinion. I am not trying to find a way to sneak around the rules, I want to know "what the rules are" I want to thank everyone for their input.

Fever Mike. I am sorry. My bad. I got so excited about the guy who called us retards that screwed up and wrongly replied to your post. I am so sorry.

Wiggler???
BuddyOO????

Just curious:party-smiley-004:

So just because the amount of your boat fuel is relatively small compared to your company's fuel expense means it's legal to deduct your personal expenses? So I guess if someone owns a company that has $500 million in revenue, the owner can write-off all his personal expenses because they're immaterial compared to the company expenses? I would like to see the IRS agents reaction to that statement.

Gramps??
Super-Cat Cove??
:party-smiley-004:

Mike, I would get a second opinion on this. If it's a rebate for the highway fuel tax, then you have the right to be refunded. One of the taxes on gas goes to fund highway maintenance and infrastructure. Since the gas is used in a boat and, therefore, not on a road, you should be reimbursed for that tax. This rebate has nothing to do with the IRS and would come from your state's DOR. Also, this rebate is not taxable income either. We have client that operates an airline that receives the same refund reported on the same form to the tune of several million dollars. They have been audited and the IRS had no issue with this. However, since the company had included the fuel tax in its fuel expense, this refund was properly classified as taxable income.

It kinda makes me sick to read some of these comments. So many comments are one person telling another how stupid, retarded, or dumb they are. Aren't we all on the same side to help our brothers with good advice? Give advice how to keep your brother out of trouble. Give advice how to do something correctly. Please don't tell everyone how much smarter you are. Some comments sound like they are coming from young high school kids trying to mark their territory and prove how much smarter they are then the kid with glasses and braces sitting next to them.

If this is directed at me, then you are taking my comments the wrong way. I never said you were stupid, retarded, or anything of the like. Some of the comments in this thread are shocking. Some guys are trying to rationalize illegal acts. I can't believe a CPA would sign some of these returns knowing this activity is included in the tax return. Obviously, under certian circumstances, boating related expenses are deductible, but most of the time they are not. Take the information in this thread and decide for yourself. This thread isn't going to do chit for you if you're sitting accross a desk from an IRS agent explaining items deducted on your tax returns.

Entrance fee - COULD BE DEDUCTIBLE. I'm not saying it is or isn't. Every poker run is different. Some of the ones I've gone on had free meals and also had a pretty good payout. For the entry fee to be deductible you need to of not received any goods or services and I would not deduct any without a charitable receipt. The problem is that you end up with say 100 guys donating $100 fee. The sponsors deduct the cost of the event, meals, and a payout at the end and the charity goes away with say 1/3 of the entry fees. That 1/3 is the deductible amount.

The professionalism comment - we do things a little different down here in Fort Worth. If you were my client and I found out what you were doing I would have been a lot more "unprofessional" about it.

The other CPA made a comment on tax preparers not having to be CPA's which is true, but thats not how we do business. I've got a Masters in Taxation and a lot of our business comes from other CPA's that don't understand the grey areas.

Anybody that is going to be grasping for that small of a dollar should find another sport. Maybe Badminton.

Actually that would be more of a hobby. You can have expenses up the the amount of income. This is a really grey area. To write the whole car off - courts would look to whether or not your running things in a businesse like manner............which is also a grey area too complex for this forum.

It does bring up another point. If you win a poker run you can deduct gas, repairs, travel, entry fees, and depreciation on the boat. BUT only to the extent of income (i.e. no losses) to offset the winnings.

Good info.

It will be ordinary income (not capital gain)

I hope you mean you expens the interest.

Mileage - I think thats very aggresive. You are allowed to deduct mileage for volunteering at charitable events. Meaning if you go and volunteer at a shelter then you can deduct the mileage. If your doing a poker run where a qualified organization is putting unfortunate kids on board like SOTW, then it would be OK as long as your chartering the kids.

Thats fraud

Generally 3 years statute

6 years if you've omitted more than 25% income

Unlimited if no return filed or fraud - government has the burden of proof to pove fraud.

NO

Budweiser boat - thats all advertising. And their race boats, which can be considered a business. The mercedez boat is being leased which can be considered a business purpose. It might as well be a billboard business.

I have been trying to find some info on this very subject...
Here is what I want to do....
I am a licensed 500 Ton Master with an Unlimited Master of Towing as well and I already have my own LLC. set up. I was thinking of trying to charter my boat to tourists in my area who would like to ride in a powerboat while here in La.
Now if I do this what would I stand to gain as far as tax write offs are concerned?
I would still use it for my personal leisure but I would actively be trying to make money with it for my company also.......


Chuck

I'm not a CPA, but having done my tax returns for business for years, and here is what I think will happen (check with your tax accountant, of course). You'll have to keep a detailed log of every hour you use the boat for business, and every hour you use it for pleasure. The business use expenses and depreciation will be deductible as a percentage of total hours used, as long as the business makes money within a predetermined period of time (3 years?). I don't know that the IRS will allow a towing service and chartering service to be considered a single business.

Michael

Thanks bro. I will check into it a bit further. My company is actually Professional Marine Pilot Service, Inc. I don't actually do towing of other vessels. I am, however, a tugboat captain as well as a licensed captain of any vessel up to 500 gross tons. In short, I can run any kind of boat as long as it doesn't exceed the aforementioned tonnage. I am thinking since the company was formed for my piloting services it may be possible.


Thanks again.

Chuck

Ok here is my question. If you own your business and put your boat in the business name and put the name on the side or some type of advertisement could you deduct it. Or would it be better to set the boat up under its own business and pay th boat business for advertising. Technically you would be advertising all the time especially if you park it along a major road when not in the water. So business and pleasure should not matter. Maybe it is legal if it is considered fair compensation for advertising. I/E a billboard cost $5000 a month and your boat is a similar size so $4000 seems fair. I would think this would really apply if you went to poker runs around the country more than if you just went out on the same lake every weekend. Give me your opinions please.