The boat sale would not be taxable unless he made a profit.
Verify the HIN, it could be faked. My own HIN fell casualty to a gelcoat job by a previous owner -- the opposite can happen.
Anybody seeking to avoid bank records of the transaction is dishonest--and there's no way around that. He might not be cheating you, but he is definitely cheating someone. Don't be too quick to assume it's not you.