Buying a boat for business use

[CharlestonMako]

I have a marine related business and really need to buy a boat for it.

What are my tax implications? can I depreciate the entire cost of the boat over 6 years and write off all the expenses replated to it?

I guess it needs to be purchased in my LLC's name right? Do I just fill that in on the title when I buy it?

If I use it for both business and pleasure what are the implications?

Maybe some fishing charter guys have some input on this... I'm legitimatly need a boat to use for my business.

Thanks,

 

[PiratePast40]

Re: Buying a boat for business use

Your tax lawyer is probably a better source of info on the subject.

 

[jay_merrill]

Re: Buying a boat for business use

If you have an LLC, you should be using a CPA for year end tax work, at a minimum. You might even being using one to do your monthly books, as well. That is the person who you should consult.

What I would do, is to have the business buy the boat and charge me for personal use of it. Since your business is an LLC and you are treated as a "member" for tax purposes, you might be able to buy the boat personally and charge the business, without much difference in tax liability. Really, though, consulting a CPA is the route to take, because there are probably some fine points and a few legal loopholes involved in the possible scenarios.



???

 

[roscoe]

Re: Buying a boat for business use

And just remember, if you ever take a passenger on the boat, you need a skippers license.

 

[aspeck]

Re: Buying a boat for business use

Federal law is more clear than your state law, and you have to be concerned about both, so check with your CPA about the laws that effect you.


Your CPA will also be able to tell you which is better, to buy the boat for the LLC and then rent it to you, or to buy the boat personally and rent it to the LLC. Both have different tax consequences. Your CPA will know your tax status and will be able to give you the most accurate and best way to go, depending on the tax bracket you and the LLC are in.

It is not something that is impossible for you to do, you just need to know the best way to do it, that is all. That is why you need a professional, not us everyday tax hacks.

Good luck and enjoy your, or your companies, new boat!

 

[Bob_VT]

Re: Buying a boat for business use

There must be a Small Business Association that will also lend some valid advice....... Rule one protect yourself first

 

[smclear]

Re: Buying a boat for business use

And just remember, if you ever take a passenger on the boat, you need a skippers license.

True, sort of..... Just taking a passenger for a ride will not require a captains license. However, if that passenger "paid" for your services, then a license is required. The key word in that phrase is "paid".

Now here's the fun part, if you're out for fun on a weekend, and your buddy chips in for gas, then in the eyes of the law, he is a "paying" customer making a license required.

 

[jay_merrill]

Re: Buying a boat for business use

I agree that the issue of having to have a Captain's license is a little more complex than the mere fact that a business might own the boat. It most cases, I don't thionk that would be neccessary.



???

 

[angus63]

Re: Buying a boat for business use

Ownership has little to do with Coast Guard licensing requirements. Uninspected vessels for hire or inspected vessels (depending on CoI results) need a licensed operator. Some insurance underwriters required licensed operators to maintain coverage. Countless vessels near me are business registered as recreational vessels and operated without license.

Our Academy training vessel has a CG Certificate of Inspection with three different license and staffing requirements depending on the voyage intent.

Your local Coast Guard station should be happy to assist you with licensing issues.

I leave tax implications to the guy behind the adding machine!!

 

[DJ]

Re: Buying a boat for business use

Back to the point-I think-IRS issues.

That's a huge RED FLAG for the IRS.

If you have a business that can justify it-go for it. (Marina, etc.) If you are trying to "bury it" forget it. They (IRS) will sniff that out in a heartbeat.

 

[roscoe]

Re: Buying a boat for business use

I agree that the issue of having to have a Captain's license is a little more complex than the mere fact that a business might own the boat. It most cases, I don't thionk that would be neccessary.



???

True, but not something that should be overlooked.

Tricky part might be if he is providing a service, like cleaning a hull of a moored boat. The owner is paying for that service. If he takes the owner out to the boat to inspect the job, as part of the job, is the owner paying for the ride?