Is anyone expensing their boat?
#41
Registered
#43
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.
Sidebar - ALL of my receipts from last year got ruined. That sucked.
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.
#44
Registered User
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.
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.
#45
Registered User
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.
#46
Gold Member
Gold Member
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.
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.
Our reimbursement through the DMV is not questionable at all. Unfortunately I have never taken advantage of it, but still - not questionable at all.
#47
Registered
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.
#48
Registered User
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.
#50
VIP Member
VIP Member
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...