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Is anyone expensing their boat?

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Old 04-10-2008, 12:54 AM
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Originally Posted by PhantomChaos View Post
They will come after you after you are dead!!!
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!

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Old 04-10-2008, 08:12 AM
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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.
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Old 04-10-2008, 09:10 AM
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Thank you. Don't know why the guy reemed me out when he was wrong but oh well. I even made the point that it was related to Virginia road tax, not in any way related to Federal or State Income tax, and that it might be different in other states - which I am sure it is.

Sidebar - ALL of my receipts from last year got ruined. That sucked.
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.
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Old 04-10-2008, 09:36 AM
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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.
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Old 04-10-2008, 09:43 AM
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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.
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.
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Old 04-10-2008, 09:49 AM
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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.
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.
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Old 04-10-2008, 10:42 AM
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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.
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Old 04-10-2008, 10:53 AM
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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.
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Old 04-10-2008, 11:14 AM
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Tax Return + Boat = AUDIT.
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Old 04-10-2008, 11:50 AM
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Originally Posted by Chris Sunkin View Post
If Anheuser Busch purchases a boat and uses it for the marketing of their product, that's certainly a legitimate marketing expense.
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...
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