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post #51 of 72 Old 12-10-2016
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Re: Teaching on YOUR boat?

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Don't know squat about the US tax system but here in Canada no tax deductions are allowed on a boat unless it is used exclusively to earn income, no personal or recreational use allowed at all.
That is very surprising.

In the US I believe the expenses are deductible based on day/hours sailing for business, pleasure.

50 days business, 50 days pleasure, 6k slip is 3k deductable.

Are you absolutely sure in Canada no personal use is allowed? It sounds like an unbelievable dumb and unenforceable law.
It doesn't make sense as the simple solution is to just not report personal use.

For example, you didn't have students but were researching the anchorage to see if it would be appropriate.

The sticky part comes in if you loose money for 4 years in a row. Then your deduction may be denied retroactively and your business reclassified as a hobby.

The lesson from the Icarus story is not about human failing.
It is a lesson about the limitations of wax as an adhesive.
If you have an engineering problem solve it.

Last edited by davidpm; 12-10-2016 at 04:09 PM.
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post #52 of 72 Old 12-10-2016
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Re: Teaching on YOUR boat?

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Originally Posted by davidpm View Post
That is very surprising.

In the US I believe the expenses are deductible based on day/hours sailing for business, pleasure.

50 days business, 50 days pleasure, 6k slip is 3k deductable.

Are you absolutely sure in Canada no personal use is allowed? It sounds like an unbelievable dumb and unenforceable law.
It doesn't make sense as the simple solution is to just not report personal use.

For example, you didn't have students but were researching the anchorage to see if it would be appropriate.

The sticky part comes in if you loose money for 4 years in a row. Then your deduction may be denied retroactively and your business reclassified as a hobby.
can't deduct our mortgages either.

There are hundreds of references to this issue on line, you can start with this one
Yamsailor likes this.

The hysterical laughter you hear as you drive a way in your"new" boat ..... is the seller.

Last edited by boatpoker; 12-10-2016 at 06:26 PM.
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post #53 of 72 Old 12-11-2016
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Re: Teaching on YOUR boat?

25 years ago I was contemplating the purchase of a boat with the intent to charter and do some instructing in BC, Canada.
Shortly after revenue Canada decided to close up the tax right offs which could be used. Making the whole thing much less viable.
There had been quite lot of Canadian made C&C boats bought and used as Charter boats in the local market. When tax deductions were allowed.
Rules changed and sales declined. C&C no longer built in Canada.
Now its very tough to prove to revenue Canada a boat is a legitimate business.
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post #54 of 72 Old 12-11-2016
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Re: Teaching on YOUR boat?

Teaching on your own boat is something I would quite like to do myself.
I have not read the whole thread yet.

I haven't done this yet. Unfortunately as far as I can tell the numbers just don't add up.
Most of the time.
There are a couple of small operators who manage to make a go of it.

I knew a few instructors who owned their own boats. quite successfully. They were small old and cheep.
The most profitable boat at the Charter company was an old Catalina 27 owned by an instructor that did nothing but sailing lessons.
The CYA and sailing school at the time had two fundamentally different ways of doing the Basic Level. Ether a Cruise and learn or Day instruction on different boats at the weekends.

Boats like old Catalina 22 or 27 did quite well on the day instruction. The boats were older and paid for.

The higher end Cruise and Learn boats some were nice but older not first choice for charters. Some did OK.
The School has since gone more upmarket.

The Charter boat market is very tough. The over head is a killer. Being able to pay the payments plus the costs of moorage, insurance and maintenance pretty much make a profitable operation impossible.
So Charter companies use a model. Some one else owns boat. Makes the payments pays the moorage and the maintenance. The Charter company acts as agent and takes a cut.
The owner doesn't make a profit but does cover a percentage of costs.

The Charter company gets its cut and pays for marketing, office, ect out of its cut. Instruction extends the season and generates customers.
The Boat owner gets their share of the charter fee. the school gets the rest and from this pays the instructor and the costs.
Most schools using newer model nicer boats. Are charging the higher rates.

To be an owner operator and successful would be difficult. You would really have to look at the business plan for the school.
I cant see. A late model boat with a mortgage being able to generate enough income to cover the payments from its share even adding an instructor fee on top.

Add in the change from employee to contractor which adds considerable complications. Re liability and particularly if you are injured makes a big difference.

I have a crazy notion. I could use my own boat.
Its paid for lock stock and barrel.
I just have to get recertified as an instructor.
The sailing schools want newer and bigger boats now.
Mine is a 35ft over 30 years old. No hot and cold water. No heat. only one forward cabin. and main saloon with a quarter berth.
I does sail well,

The problem is would anyone be willing to pay to come sailing on my old boat or would they rather pay to sail on a nice new boat.

So I guess it depends on the instructors boat.
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post #55 of 72 Old 12-11-2016
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Re: Teaching on YOUR boat?

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can't deduct our mortgages either.

There are hundreds of references to this issue on line, you can start with this one
First of all, this doesn't affect me at all as I'm in the US. But since this is the Internet and it is a rule that I argue about stuff I neither know or care about this quote from the link you sent me is of interest.

"The general limitations on business expenses are set out in section 18. Paragraph 18(1)(a) provides that no outlay or expense is deductible in computing the income of a taxpayer from a business unless it was made or incurred for the purpose of gaining or producing income."

Deducting a runabout to get to work would not be deductible in the US either. It would be treated as personal travel from home to work. If however you bought a boat for the purpose of teaching sailing and you used it a couple weekends for a personal trip I doubt the whole boat would be considered personal use.

And as I said before you could have a valid business reason for that trip even without students. You could be checking out a new anchorage, testing a new anchor or any of a hundred "reasons" to make your teaching trips better.

And even if the two trips were deemed personal there would reasonably be some way to not deduct just that portion.

Even the US president can take personal trips in Air Force One if he pays standard commercial fair.

Also since you are in Canada, there is a good chance you never got to use the boat for personal use.
Short Season joke here. (:-

____________
Just read Uricanejack's post so ignore the above. Apparently, your tax code is wicked strict. Have to pay for health care somehow.

The lesson from the Icarus story is not about human failing.
It is a lesson about the limitations of wax as an adhesive.
If you have an engineering problem solve it.

Last edited by davidpm; 12-11-2016 at 09:37 AM.
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post #56 of 72 Old 12-11-2016
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Re: Teaching on YOUR boat?

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Originally Posted by davidpm View Post
First of all, this doesn't affect me at all as I'm in the US. But since this is the Internet and it is a rule that I argue about stuff I neither know or care about this quote from the link you sent me is of interest.

"The general limitations on business expenses are set out in section 18. Paragraph 18(1)(a) provides that no outlay or expense is deductible in computing the income of a taxpayer from a business unless it was made or incurred for the purpose of gaining or producing income."

Deducting a runabout to get to work would not be deductible in the US either. It would be treated as personal travel from home to work. If however you bought a boat for the purpose of teaching sailing and you used it a couple weekends for a personal trip I doubt the whole boat would be considered personal use.

And as I said before you could have a valid business reason for that trip even without students. You could be checking out a new anchorage, testing a new anchor or any of a hundred "reasons" to make your teaching trips better.

And even if the two trips were deemed personal there would reasonably be some way to not deduct just that portion.

Even the US president can take personal trips in Air Force One if he pays standard commercial fair.

Also since you are in Canada, there is a good chance you never got to use the boat for personal use.
Short Season joke here. (:-
The way it works, generally in the US, is one must keep a contemporaneous log that differentiates between business and personal usage/expenses; then deductions / taxes due, etc. What 'you owe' and what you are 'entitled to deduct' are based on the percent differences between totals, etc. of the two sections (business and pleasure) of the contemporaneous log. This applies also to personal vehicles used for business, the proportion of expenses/liabilities etc. etc. of your domicile, etc. used for business, etc. etc.
That's pretty fair when you think about it.
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post #57 of 72 Old 12-11-2016
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Re: Teaching on YOUR boat?

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The way it works, generally in the US, is one must keep a contemporaneous log that differentiates between business and personal usage/expenses; then deductions / taxes due, etc. What 'you owe' and what you are 'entitled to deduct' are based on the percent differences between totals, etc. of the two sections (business and pleasure) of the contemporaneous log. This applies also to personal vehicles used for business, the proportion of expenses/liabilities etc. etc. of your domicile, etc. used for business, etc. etc.
That's pretty fair when you think about it.
Exactly what I meant but better said.

The lesson from the Icarus story is not about human failing.
It is a lesson about the limitations of wax as an adhesive.
If you have an engineering problem solve it.
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post #58 of 72 Old 12-11-2016
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Re: Teaching on YOUR boat?

I tried all the schemes to make a buck .Diving mother boat included. I even followed the herring fleet with a couple of working girls. Best ever was my 3 hour sail (google it) Rev Can wanted to charge me my board because I was livea brd. And moorage because I had to moor it somewhere. My side said I live in Thailand if I'm not working the boat and I would be on the anchor if I wasn't hustling tourists so business related. The difference bought 20 winters on a tropical beach and a revenue house in Nanaimo so it worked out. Sailing lessons are left for those bottom feeders who find that fun.
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Re: Teaching on YOUR boat?

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Rev Can wanted to charge me my board because I was livea brd. And moorage because I had to moor it somewhere.
Wow ! so I can expect a bill from CRA for my moorage and board for the last 20yrs. ?
Do they charge by the foot ?

The hysterical laughter you hear as you drive a way in your"new" boat ..... is the seller.
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post #60 of 72 Old 12-12-2016
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Re: Teaching on YOUR boat?

presuming you have captains license--i know not all sailing instructors are licensed captains. it could be a benefit. especially as you will be receiving money on your boat which does require captain licensure.
just donot forget.... unless you are already licensed, which sets you in a special place as an instructor.
sounds like you have it covered and will have adventures.


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