"Maxprop" wrote in message
nk.net...

"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?

It's just not true Max. They may consider it a hobby, but if I can show that
it's an ongoing business, there's nothing they can do. My father, for
example, had a paper loss for 14 years in a row. Of course, they audited
him, but he won every time. After the third audit, he told them they would
be liable for his expenses, and on the fourth audit, he collected from them.

Very good lawyer actually. Even better CPA. g

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.

Don't take that bet. I don't need the money. I have a good strategy for
rates of return, but thanks for your concern. g (Didn't miss it, btw)


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?

I never claimed that. What I'm saying is that a huge negative of $25K is
dumb if I don't have to do 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.

Of course.. interest on the loan can be written off. A sizeable portion of
the other expenses can be written off as business expenses. I could use the
boat 50% as a vacation home 50% as a business. There's nothing wrong with
that at all.

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.

I like my privacy. A private suite would be more to my liking. g