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Is anyone expensing their boat?

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Old 04-09-2008, 02:43 PM
  #21
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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.
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.
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Old 04-09-2008, 02:52 PM
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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
Remember.......you can only deduct interest on the first $1.1M of the loan(s).
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Old 04-09-2008, 03:27 PM
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Remember.......you can only deduct interest on the first $1.1M of the loan(s).
I'm 27 - not a real big issue for me but yeah I did know there was a ceiling on it.
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Old 04-09-2008, 03:28 PM
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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.
Yes that is what I am talking about and unless you make money with your boat....it;s not a pleasure boat and you're a licensed captain you can not take advantage of this....or you can lie about it and get a nice sudit from the IRS.
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Old 04-09-2008, 03:31 PM
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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.
I know I can't believe it either. I showed this thread to my accountant and he just shook his head. My account is really really good but we do everything legal too.

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.
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Old 04-09-2008, 03:38 PM
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Yes that is what I am talking about and unless you make money with your boat....it;s not a pleasure boat and you're a licensed captain you can not take advantage of this....or you can lie about it and get a nice sudit from the IRS.
This is not true. It is perfectly legal to get your road tax reimbursement back in Virginia. I do it every year.

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
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Old 04-09-2008, 03:49 PM
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I hope the IRS reads this thread! They are going to have a field day with the audits!
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Old 04-09-2008, 04:12 PM
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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.
I agree 100%, I too have a good accountant and anyone considering doing this might as well raise the biggest red flag they can find.
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Old 04-09-2008, 06:48 PM
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Unphuckinbelievable what I'm reading.

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.
No kidding.
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...???
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Old 04-09-2008, 07:01 PM
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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
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