Possessed!
 

Well, we are, at least, about to possess ...

.... But the question is, how.

Various prior threads have dealt with various forms of ownership. We're
wrestling with whether to take the boat personally, form a corporation,
limited liability entity, limited partnership, general partnership, or
something else.

We'll have pretty limited assets other than the boat, so don't expect we'd
be 'targets' of any sort, but there may well be other reasons to take
possession other than just personally.

Do any here have experience in that area, and if so, why did you do it one
way or the other?

We'll be living aboard, as our primary residence, and are considering
financing for liquidity purposes, not for ability to buy, but might have
some use for write-offs, as we'll both be working during part of the year.
Unlike our original plans, we'll not use the boat in a charter or other
income generation, as far as we can see. Any legal or accounting types
looking on with experience in this (how to take possession, and why)?

Thanks.

L8R

Skip and Lydia

--
"Twenty years from now you will be more disappointed by the things you
didn't do than by the ones you did do. So throw off the bowlines. Sail away
from the safe harbor. Catch the trade winds in your sails. Explore. Dream.
Discover." - Mark Twain

Possessed!
 

Skip
You can run into some real problems if you ever go into a French Island.
They have a very different view of US corporations and look at you as some
type of hired crew. As such, you must have the proper seamanship (50 tom
master) papers as well as permission by the corporation for you to use the
boat. Then they want to see how you came to be in possession of a corporate
boat and the bull sh@# questions go on and on. There were some real
horror stories of entry into French Islands with the paper work a little
odd. Best to follow the kiss principle on this one. Buy the boat, pay the
tax and get it documented. Life will be much simpler
Bruce

--
See how our Endeavour is progressing at
www.cruisinglife.net/horizonproject.htm

Possessed!
 

Skip
You can run into some real problems if you ever go into a French Island.
They have a very different view of US corporations and look at you as some
type of hired crew. As such, you must have the proper seamanship (50 tom
master) papers as well as permission by the corporation for you to use the
boat. Then they want to see how you came to be in possession of a corporate
boat and the bull sh@# questions go on and on. There were some real
horror stories of entry into French Islands with the paper work a little
odd. Best to follow the kiss principle on this one. Buy the boat, pay the
tax and get it documented. Life will be much simpler
Bruce

--
See how our Endeavour is progressing at
www.cruisinglife.net/horizonproject.htm

Possessed!
 

"Bruce" wrote in message
...
Skip
You can run into some real problems if you ever go into a French Island.
They have a very different view of US corporations and look at you as some
type of hired crew. As such, you must have the proper seamanship (50 tom
master) papers as well as permission by the corporation for you to use the
boat. Then they want to see how you came to be in possession of a
corporate
boat and the bull sh@# questions go on and on. There were some real
horror stories of entry into French Islands with the paper work a little
odd. Best to follow the kiss principle on this one. Buy the boat, pay
the
tax and get it documented. Life will be much simpler
Bruce

The French bit is good to know. It wasn't about tax avoidance, but rather,
the various reasons for the various ways to take possession. I think the
boats we'll consider will already be documented, so it will be more a matter
of whether we boogie for the islands right away or take up residence for a
time wherever it is, while we shake it down.

L8R

Skip and Lydia

--
"Twenty years from now you will be more disappointed by the things you
didn't do than by the ones you did do. So throw off the bowlines. Sail away
from the safe harbor. Catch the trade winds in your sails. Explore. Dream.
Discover." - Mark Twain

--
See how our Endeavour is progressing at
www.cruisinglife.net/horizonproject.htm

Possessed!
 

"Bruce" wrote in message
...
Skip
You can run into some real problems if you ever go into a French Island.
They have a very different view of US corporations and look at you as some
type of hired crew. As such, you must have the proper seamanship (50 tom
master) papers as well as permission by the corporation for you to use the
boat. Then they want to see how you came to be in possession of a
corporate
boat and the bull sh@# questions go on and on. There were some real
horror stories of entry into French Islands with the paper work a little
odd. Best to follow the kiss principle on this one. Buy the boat, pay
the
tax and get it documented. Life will be much simpler
Bruce

The French bit is good to know. It wasn't about tax avoidance, but rather,
the various reasons for the various ways to take possession. I think the
boats we'll consider will already be documented, so it will be more a matter
of whether we boogie for the islands right away or take up residence for a
time wherever it is, while we shake it down.

L8R

Skip and Lydia

--
"Twenty years from now you will be more disappointed by the things you
didn't do than by the ones you did do. So throw off the bowlines. Sail away
from the safe harbor. Catch the trade winds in your sails. Explore. Dream.
Discover." - Mark Twain

--
See how our Endeavour is progressing at
www.cruisinglife.net/horizonproject.htm

Possessed!
 

ownership

I'm not a lawyer. Take the following only as an indication of what you
may wish to look into. If you already know what state your residence
will be in, a good estate lawyer can answer most of your questions. I
really don't know what resource could give you a comparative analysis of
various states.

Your legal residence:
There are various tax and legal implications relating to what state you
"live" in. There is some heavy duty number crunching needed here because
it involves many different types of taxes: sales, income, property,
intangible property, inheritance, vehicle, insurance regulations,
pension regulations, marital (family) laws, etc.

States differ widely on how they regulate and tax boat owners, although
the theme generally remains $$$$. In California there is actually a
legal method of taking possesion of a boat without paying sales tax (or
was 2 years ago when last I looked it up). HOWEVER, some states
apparently insist that if you can't prove you've paid sales tax to
_somebody_, then you owe it to them if you come and stay within their
jurisdiction for some nominal time (3 months?). Since sales tax can be a
pretty bit of change, depending on where you berth (what state and
county), this may be worth investigating within the context of any plans
you have already made.

Federal documentation may be helpful in some dire straits. One local
harbor had a documented hulk residing grandly in front of the harbor
master's office for almost a year - _after_ he started trying to sell it
under lien - because the feds wouldn't allow it without the right forms
getting filled out. Naturally the owner couldn't find time to file the
forms.

Various ownerships:
If multiple parties own an asset with the word AND between the names on
the title, not the word OR, it usually becomes more difficult to seize
it all. Certain trust setups allow the placing of large assets in the
name of the next generation (or, probably, of anybody else you might
choose) while allowing the trustees full use and benefit of that asset
during their life times. Estate lawyers know about ownership issues.

Quite aside from ownership, another useful practice involves setting up
your own company. There are often price advantages to purchasing
equipment as one _business_ to another. RJ Systems, with a tax exempt
number, buying from Acme Chain & Rigging, usually pays less than Robert
Jones using a VISA card at West Marine. But your income tax consultant
needs to know about this.

Finally, my insurance rant: Insurance is becoming a lose/lose-more
proposition for US citizens. I think you will need to invest some
serious time in finding a policy. After diligent and deep research to
weed out the most egregious rip-offs you will still find your cruising
much restricted as you try to not void your policy coverage. In
particular you will need to watch your cruising areas, time of year,
number of _experienced_ crew, distance from shore, type of equipment,
and what the weather report on record has said, where you berth your
boat, where you haul it. One issue recently exposed is what coverage you
(don't) have between the water and the place your boat is placed in a
yard - ie. while it's on the crane or travel-lift. Another sore point is
live-aboard issues - some policies prohibit it, others have _no_
personal property or liability coverage. Another point is coverage while
you live aboard in a yard. Get a copy of the policy before you waste
your time signing it and read all 30 pages of it at least twice. I
suspect it will leave a bad taste in your mouth. Actually you may find
it quite difficult to even get a copy of the policy, unless you give
them money - but it can be done. I'm afraid that to me insurance
companies appear to have stopped offering value and started to collect
extortion.

But for all that, it should be a grand adventure. Good luck.

Rufus

Possessed!
 

ownership

I'm not a lawyer. Take the following only as an indication of what you
may wish to look into. If you already know what state your residence
will be in, a good estate lawyer can answer most of your questions. I
really don't know what resource could give you a comparative analysis of
various states.

Your legal residence:
There are various tax and legal implications relating to what state you
"live" in. There is some heavy duty number crunching needed here because
it involves many different types of taxes: sales, income, property,
intangible property, inheritance, vehicle, insurance regulations,
pension regulations, marital (family) laws, etc.

States differ widely on how they regulate and tax boat owners, although
the theme generally remains $$$$. In California there is actually a
legal method of taking possesion of a boat without paying sales tax (or
was 2 years ago when last I looked it up). HOWEVER, some states
apparently insist that if you can't prove you've paid sales tax to
_somebody_, then you owe it to them if you come and stay within their
jurisdiction for some nominal time (3 months?). Since sales tax can be a
pretty bit of change, depending on where you berth (what state and
county), this may be worth investigating within the context of any plans
you have already made.

Federal documentation may be helpful in some dire straits. One local
harbor had a documented hulk residing grandly in front of the harbor
master's office for almost a year - _after_ he started trying to sell it
under lien - because the feds wouldn't allow it without the right forms
getting filled out. Naturally the owner couldn't find time to file the
forms.

Various ownerships:
If multiple parties own an asset with the word AND between the names on
the title, not the word OR, it usually becomes more difficult to seize
it all. Certain trust setups allow the placing of large assets in the
name of the next generation (or, probably, of anybody else you might
choose) while allowing the trustees full use and benefit of that asset
during their life times. Estate lawyers know about ownership issues.

Quite aside from ownership, another useful practice involves setting up
your own company. There are often price advantages to purchasing
equipment as one _business_ to another. RJ Systems, with a tax exempt
number, buying from Acme Chain & Rigging, usually pays less than Robert
Jones using a VISA card at West Marine. But your income tax consultant
needs to know about this.

Finally, my insurance rant: Insurance is becoming a lose/lose-more
proposition for US citizens. I think you will need to invest some
serious time in finding a policy. After diligent and deep research to
weed out the most egregious rip-offs you will still find your cruising
much restricted as you try to not void your policy coverage. In
particular you will need to watch your cruising areas, time of year,
number of _experienced_ crew, distance from shore, type of equipment,
and what the weather report on record has said, where you berth your
boat, where you haul it. One issue recently exposed is what coverage you
(don't) have between the water and the place your boat is placed in a
yard - ie. while it's on the crane or travel-lift. Another sore point is
live-aboard issues - some policies prohibit it, others have _no_
personal property or liability coverage. Another point is coverage while
you live aboard in a yard. Get a copy of the policy before you waste
your time signing it and read all 30 pages of it at least twice. I
suspect it will leave a bad taste in your mouth. Actually you may find
it quite difficult to even get a copy of the policy, unless you give
them money - but it can be done. I'm afraid that to me insurance
companies appear to have stopped offering value and started to collect
extortion.

But for all that, it should be a grand adventure. Good luck.

Rufus

Possessed!
 

Rufus wrote:

Finally, my insurance rant: Insurance is becoming a lose/lose-more
proposition for US citizens...
... I'm afraid that to me insurance
companies appear to have stopped offering value and started to collect
extortion.

I couldn't agree with you more.

they don't seem to want to be in their alleged business any more --
that is, the business of gambling, underwriting other people's risks.
instead they seem to be in the business of collecting the money and then
refusing to pay it out if the slightest risk has been taken. their
present focus is not on insuring you against risk, but on trying to
prevent you from taking any. will we see the day when boat insurance
policies prohibit leaving the dock if the wind exceeds 10 kts? or
leaving the dock at all? sour grin

in CA these days, many marinas will not rent you a slip unless you can
show proof of $300K of liability/collision insurance. some Canadian
E Coast insurers, so I hear, are refusing to underwrite any boat with a
wood stove aboard (but they are happy about propane stoves which imho are
far more dangerous). the insurance biz is becoming a racket: coercive,
restrictive, and I fear it may also become mandated (legislation mandating
a captive market for them to plunder).

grmph.

de

--
.................................................. ............................
:De Clarke, Software Engineer UCO/Lick Observatory, UCSC:
:Mail: | Your planet's immune system is trying to get rid :
:Web: www.ucolick.org | of you. --Kurt Vonnegut :
:1024D/B9C9E76E | F892 5F17 8E0A F095 05CD EE8B D169 EDAA B9C9 E76E:

Possessed!
 

Rufus wrote:

Finally, my insurance rant: Insurance is becoming a lose/lose-more
proposition for US citizens...
... I'm afraid that to me insurance
companies appear to have stopped offering value and started to collect
extortion.

I couldn't agree with you more.

they don't seem to want to be in their alleged business any more --
that is, the business of gambling, underwriting other people's risks.
instead they seem to be in the business of collecting the money and then
refusing to pay it out if the slightest risk has been taken. their
present focus is not on insuring you against risk, but on trying to
prevent you from taking any. will we see the day when boat insurance
policies prohibit leaving the dock if the wind exceeds 10 kts? or
leaving the dock at all? sour grin

in CA these days, many marinas will not rent you a slip unless you can
show proof of $300K of liability/collision insurance. some Canadian
E Coast insurers, so I hear, are refusing to underwrite any boat with a
wood stove aboard (but they are happy about propane stoves which imho are
far more dangerous). the insurance biz is becoming a racket: coercive,
restrictive, and I fear it may also become mandated (legislation mandating
a captive market for them to plunder).

grmph.

de

--
.................................................. ............................
:De Clarke, Software Engineer UCO/Lick Observatory, UCSC:
:Mail: | Your planet's immune system is trying to get rid :
:Web: www.ucolick.org | of you. --Kurt Vonnegut :
:1024D/B9C9E76E | F892 5F17 8E0A F095 05CD EE8B D169 EDAA B9C9 E76E:

Possessed!
 

Rufus wrote:


Finally, my insurance rant: Insurance is becoming a lose/lose-more
proposition for US citizens...
... I'm afraid that to me insurance
companies appear to have stopped offering value and started to collect
extortion.



Then De Clarke wrote:


I couldn't agree with you more....
the insurance biz is becoming a racket: coercive,
restrictive, and I fear it may also become mandated (legislation mandating
a captive market for them to plunder).


Most people blame high insurance rates (whether you're talking about boat ins, car ins., business ins. or any other king of insurance) on either lawyers too willing to take on frivolous cases in the insurance lottery or the juries too willing to hand out high awards (especially for pain and suffering).

It is a complex equation and these are certainly valid contributors, but consider this.

The cost of litigation, let alone the cost of losing a court case has risen so high that it is extremely dangerous not to have insurance. As a result, we have all become captive customers for the handful of insurance companies out there. A number so small that they form what is effectively, if not actually, a monopoly.

I've no evidence to back my feelings up, but I really don't believe that insurance companies look upon high awards or settlements as a bad thing. It's the best advertising they have and a wonderful justification for extraordinarily high rates.

P.S. I've never understood why my boat/car/house/business insurance rates went up because of the 911 attack. Completely ignoring for the moment that our government succeeded in getting the vast majority of potential plaintiffs to give up their right to sue in return for a cash settlement from the tax payers, my tax rates going up implies that they are pooling ALL risks. If this is so, why do I have to pay more for my teenagers' car insurance that I do for my wife and I? It may be that I'm just too stupid to understand these complex issues, but methinks I see a contradiction here.

OK, I'm off the soap box now, we can go back to talking about sailing topics.


--
Dan Best - (707) 431-1662, Healdsburg, CA 95448
B-2/75 1977-1979
Tayana 37 #192, "Tricia Jean" http://rangerbest.home.comcast.net/TriciaJean.JPG