Join Date: Feb 2010
Location: Narragansett Bay
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Did a tax professional set this up for you in the first place? Often they don't and people try to jam it into their returns with a home software app, without knowing the long term I plications. Worse, there are dealers that sell boats with this scam. While they may be legit tax positions, they often leave out the whole story. Such as, with a boat in a bussiness, you may have no choice but to depreciate it and take that deduction. Now deductions always sound good, but in the case of depreciation you also lower the basis (or your theoretical purchase price) each time you take a depreciation deduction. That means that when you sell it, you will likely have a huge gain that you will have to pay taxes on.
This is only a random anecdote to point out the need for a dispassionate accountant to review the situation and be sure you are aware of all issues, both today and down the road.
Many are uncomfortable fessing up to what they did, but trust me, that's nothing like the discomfort of an audit.
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In the harsh marine environment, something is always in need of repair. Margaritas fix everything.