LLC to own boat
#21
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Not looking to use it to dodge paying taxes. More worried about protecting personal assests. I have a lawyer forming the LLC and overseeing the sale. He is treating the sale as if it were a home. Checking out title status etc.
#22
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It still sounds like tax evasion to me. Let me review - You form an LLC and the only asset is a boat that was contributed by you - and recorded at cost for tax reasons. I'm guessing it's a pretty nice boat and your selling it for less than what it cost you. So you sell the business and create a loss on the sale of business assets, which goes on the K-1, which ends up on your tax return as a huge tax loss/deduction.
Sounds like a nice double whammy from the lawyers viewpoint - except for the fact that its illegal. Do you fully understand the tax implications of doing this transaction? There is more to it then just escaping the liability of the sale.
#23
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Unless something has changed:
You can set up a Sub Chapter S Corporation and buy a boat through that. The corporate shield can be broken by any decent attorney, so the liability is still there BUT when you sell the boat, you sell the whole company with the boat as part of it and the next buyer pays no sales tax. Bottom line is your boat holds it's value better...
You can set up a Sub Chapter S Corporation and buy a boat through that. The corporate shield can be broken by any decent attorney, so the liability is still there BUT when you sell the boat, you sell the whole company with the boat as part of it and the next buyer pays no sales tax. Bottom line is your boat holds it's value better...
Honestly cannot believe what I am reading. You cannot setup any form of business just to get tax deductions for the personal use of assets. Bottom line is you must be actively conducting a business. Anybody who does this is a complete idiot or has been listening too long to their idiot lawyers.
You might as well just go robe a bank.
#24
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I call BS. Your boat holds its value better becuase the next buyer doesn't have to pay sales tax..........
Honestly cannot believe what I am reading. You cannot setup any form of business just to get tax deductions for the personal use of assets. Bottom line is you must be actively conducting a business. Anybody who does this is a complete idiot or has been listening too long to their idiot lawyers.
You might as well just go robe a bank.
Honestly cannot believe what I am reading. You cannot setup any form of business just to get tax deductions for the personal use of assets. Bottom line is you must be actively conducting a business. Anybody who does this is a complete idiot or has been listening too long to their idiot lawyers.
You might as well just go robe a bank.
In the article below, it clearly speaks of what I'm talking about but in a slightly different manner (setting up the Corp in a state that does not have sales tax). It also clearly shows that he legally saved money. (the dude was supposed to pay the excise tax regardless of how he bought the boat, so that is moot)
http://www.boston.com/news/local/pol..._on_his_yacht/
If you can avoid tax for the next purchaser, the value of your boat is greater. That is simple math.
Boat A and Boat B are exactly the same, both are asking $300,000.
A is not part of a corp, B is part of a corp so you are buying the corp and don't have to pay tax.
Total price on A would be $318,000 (6% tax)
Total price on B would be $300,000.
You are either going to buy boat B, or you are going to negotiate with boat A so the price is the same making the value of A less than the value of B.
#25
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All states are different with regards to sales tax.
In OK I can and do buy used boats without paying sales tax as long as its a 1999 or older. And I don't need a fake LLC to do it - its just the sales tax law. Sales tax issues are just a piece of the big picture of which you don't understand
With 4 (I'll admit thats not a whole lot) years of accounting experience and a masters in tax - I don't need to do any research. Seems to me that the article in itself is a forewarning not to do this. If it was 100% OK then there wouldn't be a "news" article.
Qoute:
"However, the state Department of Revenue still pursues sales taxes owed, plus penalties and interest, if it is clear that the owner took steps to avoid the tax, said department spokesman Tim Connolly."
Another thing your lawyer will not tell you - if the govt finds that the transaction and/or business enterprise was set up solely to avoid taxes - it will be disregarded and you will owe for back taxes. Thats IRC 101. Maybe you should do some real research outside of a newspaper article written by some reporter who also doesn't know anything about taxes.
In OK I can and do buy used boats without paying sales tax as long as its a 1999 or older. And I don't need a fake LLC to do it - its just the sales tax law. Sales tax issues are just a piece of the big picture of which you don't understand
With 4 (I'll admit thats not a whole lot) years of accounting experience and a masters in tax - I don't need to do any research. Seems to me that the article in itself is a forewarning not to do this. If it was 100% OK then there wouldn't be a "news" article.
Qoute:
"However, the state Department of Revenue still pursues sales taxes owed, plus penalties and interest, if it is clear that the owner took steps to avoid the tax, said department spokesman Tim Connolly."
Another thing your lawyer will not tell you - if the govt finds that the transaction and/or business enterprise was set up solely to avoid taxes - it will be disregarded and you will owe for back taxes. Thats IRC 101. Maybe you should do some real research outside of a newspaper article written by some reporter who also doesn't know anything about taxes.
#26
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I was young and stupid once and I tried to fuc& around with taxes, corporations and questionable business setups. All on the advice of a fancy, ex-corporate CPA's advice. They were very understanding of my naivete and didn't subject me to any criminal proceedings. They did bend me over and give it to me hard. Real hard. Now that I'm no longer a kid, I doubt they'd be so kind.
Me? I learned my lesson. For the rest of you, Y'all go and do whatcha' gotta' do. Don't cry when you get stung though.
Me? I learned my lesson. For the rest of you, Y'all go and do whatcha' gotta' do. Don't cry when you get stung though.
#27
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Thanks Chris,
Tax fines today are 5X what they were 5 years ago. Even the CPA's get fined or lose their license; or else I would be a little more apt to find you a loophole
Tax fines today are 5X what they were 5 years ago. Even the CPA's get fined or lose their license; or else I would be a little more apt to find you a loophole
#28
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I am only buying a boat right now. Not selling. The only reason for the LLC is to protect my personal assets while owning the boat. If someone were to get hurt on the boat or by the boat, it is my understanding that the llc protects your personal assets.
Not doing it for tax purposes. LLC will be formed in my own state. I am following advice from CPA, and lawyer. I am young, and listening to people who are supposed to know more about their field than I do. Ask me about construciton, and you will get a knowlegable answer, about taxes and laws, I try to get an opinion from someone in that field.
Am I being steered wrong?
God forbid something happen in the boat, and I am sued for the cost of my home that I am trying to pay off.
Not doing it for tax purposes. LLC will be formed in my own state. I am following advice from CPA, and lawyer. I am young, and listening to people who are supposed to know more about their field than I do. Ask me about construciton, and you will get a knowlegable answer, about taxes and laws, I try to get an opinion from someone in that field.
Am I being steered wrong?
God forbid something happen in the boat, and I am sued for the cost of my home that I am trying to pay off.
#29
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The only reason for the LLC is to protect my personal assets while owning the boat. If someone were to get hurt on the boat or by the boat, it is my understanding that the llc protects your personal assets.
Am I being steered wrong?
God forbid something happen in the boat, and I am sued for the cost of my home that I am trying to pay off.
Am I being steered wrong?
God forbid something happen in the boat, and I am sued for the cost of my home that I am trying to pay off.
Again, as I wrote before, all anyone would ever have to do would be to have loads of corporations for everything and never buy insurance for any of it.
You want security and peace-of-mind? Buy good insurance from a reputable carrier. Then, buy a personal umbrella. If one of your insurance quotes is significantly lower than the others, that's a red flag.