"Capt. JG" wrote in message
...
"Maxprop" wrote in message
ink.net...

Once again, the IRS might like to have a chat with you. You must show a
profit within five years or the write-offs become retroactively taxable.


NO. Totally incorrect. There is no law nor IRS ruling that says I have to
make a profit. If I can show that I've made a good faith effort to make a
profit, that's all that's required. Suggestion: keep your day job.

You'd be well advised to check that out, John. According to the Uniform Tax
Code of the IRS, you have five years to make a profit, after which your
business is no longer considered a business. Got a good lawyer?

Fergeddit. No one can afford Bay Area real estate any longer. g

I can, have, and will.

Did you miss the smiley face, Jon? There are always investments in real
estate everywhere and in all price ranges, but I'm betting you can't afford
the ones that will give your the rate of return you need to offset the
interest on a boat loan.

Bottom line... the cash flow is much better. Thus, it's a better deal
to finance the boat.

Well, I've left out a lot. I'm sure you can pick it apart if you try.

If you'd simply bought the boat, your cash flow would have been positive.
With your calculations, it couldn't possibly be. Fact: the interest you
pay on a boat loan will always exceed the tax savings possible by writing
off the interest expense.

Huh? That's a negative cash flow of $25K all at once!

Get a job in the real world, Jon. Of course it is. Every time a business
buys something, it's a negative cash flow. Are you claiming that you only
have a positive cash flow? Constantly? Just a few paragraphs ago you claim
that an indefinite net loss is fine with the IRS, but now you're decrying a
negative cash flow. Which is it?


But to cut to the chase, we were talking about boats used for recreation,
not for business. If you can legitimately use yours for business, more
power to ya. Most of us either can't or wish to risk an audit every
other year. The IRS just loves it when folks write-off boats as a
business expense. The old rule was generally thus: the very rich can
write-off very expensive boats, at least in part, as business expenses,
but the rest of us cannot write off our small craft unless we are in the
charter business. If you do what you claim above, you'll doubtlessly be
audited sometime down the road. Hope your documentation is in order.

You said NEVER buddy. The answer is not never. In addition, there is
nothing wrong with having a deduction as a second home on a boat. You're
required to have sleeping accomodations, a working head, and cooking
facilities. And, that has nothing to do with a commercial venture.

But only the interest on the loan can be written off, not the entire
payment, the dock fee, and the other things you claim to write off.

Sheesh. I'm sure glad you aren't my accountant!

I'll bet yours will be Bubba's roommate at Leavenworth, if its he who's been
advising you.

Max