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Rhawn Wakeboarder.com Freak
Joined: 14 Jun 2006 Posts: 3127 City: Richmond, V to the Izzay
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Posted: Jun 11, 2008 4:59 pm Post subject: Wake related business/website and tax write offs: 101 |
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Lets say you owned a wake related business or website, and attempted to make a profit from said venture. How much of your boat time / gas / expenses / equipment are tax deductible? If you are snapping pics for content, articles, etc.
Holy crap wrong forum, can someone please move this to business..... _________________ WakeSurf and Wakesurfing News |
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jryoung Ladies Man
Joined: 19 Mar 2004 Posts: 7664 City: Man Jose
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Posted: Jun 11, 2008 9:51 pm Post subject: |
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All ordinary and necessary business related expenses would be deductible. So if you use your boat 50% of the time for pleasure and 50% for business then you could deduct 50% of your expenses. _________________
Quote: | You don't meet many old vegans. It's mostly young priviliged kids trying to figure out where they stand in the world. | - Steve Rinella |
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Wakebrad Ladies Man
Joined: 11 Dec 2003 Posts: 12257 City: Dallas
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Posted: Jun 12, 2008 7:30 am Post subject: |
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If you do this, do you need to put commercial insurance on your boat? _________________ You have just entered the twilight zone. |
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Rhawn Wakeboarder.com Freak
Joined: 14 Jun 2006 Posts: 3127 City: Richmond, V to the Izzay
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Posted: Jun 12, 2008 8:05 am Post subject: |
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Good question. What are the other implications and reqs for doing this?
Calling K-Dub and Flixmaster! _________________ WakeSurf and Wakesurfing News |
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K-dub Ladies Man
Joined: 12 Jan 2003 Posts: 14760
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Posted: Jun 12, 2008 10:37 am Post subject: |
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Rhawn, just got the p.m. link.
shoot....wish I could be of some more assistance here, but all sides of the business that would fall into that kind of realm are dealt with by our corporate office.....I literally have NO experience on this side of things. I run the day to day side of things here, and that's about it.
jryoung and corporate would be the best two guys for info on the Tax side of the business venture, for sure. They are who I would go to for this info., if I were looking. |
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brew Wakeboarder.com Freak
Joined: 09 Aug 2005 Posts: 2778 City: Jackson
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Posted: Jun 13, 2008 9:53 am Post subject: |
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Quote: | All ordinary and necessary business related expenses would be deductible. So if you use your boat 50% of the time for pleasure and 50% for business then you could deduct 50% of your expenses. |
This is true. However, depending on what exactly the business is you could probably get closer to 100% business use. I would put advertising on the boat, truck, whatever to show there is a business use and then do as much photography as you can. Even if you're out screwing around take pictures and keep them stored. If you use 1 out of every 50 pictures, but you keep the pictures, you would likely be able to make the argument that each use of the boat was business related. Also, keep a log of when the boat's used and any business purpose of that use, because if you get audited the IRS is going to want logs and documentation.
You will likely need to depreciate a portion of the boat also for the business use and will then have a gain on it when you sell it. As long as you continually trade that gain will get pushed further down the road. I would also take gas, equipment, insurance, maintenance, mileage on the truck to pull it, etc.
All that being said, if this is something that is going to generate a few thousand in sales a year, you'll lose on a high business % use. Also, if it's not something that is truly wake related you'll lose. It can't be some little side business that you just put pictures of your boat up on the website. |
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jryoung Ladies Man
Joined: 19 Mar 2004 Posts: 7664 City: Man Jose
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Posted: Jun 14, 2008 12:10 pm Post subject: |
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Yep, what he said (thanks for putting it in detail Brew). Further, depending on the nature of the business and the use of the boat, incorporating would probably be a good idea. Given the risk of wake/boating injuries shielding yourself from any potential liability is a good idea.
I was on a double up experience ride with Greg Nelson and Co. back in 1999. We came in, picked up some riders and took them out. Some kid who couldn't really wakeboard gets out there, falls and the board split his forehead open pretty good. He gets cleaned up (he's going to need stitches) and we get back to shore. He walks up to Greg and says "I don't remember signing a liability waiver".
It wasn't my place to say anything nor my responsibility, but that douche needed to be slapped. _________________
Quote: | You don't meet many old vegans. It's mostly young priviliged kids trying to figure out where they stand in the world. | - Steve Rinella |
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brew Wakeboarder.com Freak
Joined: 09 Aug 2005 Posts: 2778 City: Jackson
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Posted: Jun 14, 2008 1:46 pm Post subject: |
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Quote: | Given the risk of wake/boating injuries shielding yourself from any potential liability is a good idea.
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To further this thought, anyone that owns a boat should have an umbrella policy. You're one bad fall, one stupid kid on a jet ski, one idiot, etc. from getting sued. People with boats (especially the ones that a lot of people on here own) are thought to have money which a lot of people look at as an open wallet. Umbrella's are fairly cheap in today's market and in my mind are a necessity. |
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Rhawn Wakeboarder.com Freak
Joined: 14 Jun 2006 Posts: 3127 City: Richmond, V to the Izzay
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Posted: Jun 15, 2008 9:25 am Post subject: |
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brew wrote: | All that being said, if this is something that is going to generate a few thousand in sales a year, you'll lose on a high business % use. Also, if it's not something that is truly wake related you'll lose. It can't be some little side business that you just put pictures of your boat up on the website. |
Thank you for the replies. Can you expand on what you mean above by 'lose' in both cases? Lose $$ on the tax deduction? _________________ WakeSurf and Wakesurfing News |
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brew Wakeboarder.com Freak
Joined: 09 Aug 2005 Posts: 2778 City: Jackson
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Posted: Jun 15, 2008 6:37 pm Post subject: |
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If you get audited you would likely lose the deductions and the IRS would hit you for back taxes, penalties, and interest.
You're perfectly capable of taking as a deduction whatever you want to. Virtually the only time it ever gets questioned is under audit. However, if you are reasonable with your deductions, you may never get audited.
That's why I stress the fact that you need to be reasonable with your deductions. If you're generating only a little bit of sales, don't try to deduct very much. If you're generating 6 figure sales, then you can probably slide by taking most of the boat usage. |
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Rhawn Wakeboarder.com Freak
Joined: 14 Jun 2006 Posts: 3127 City: Richmond, V to the Izzay
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Posted: Jun 16, 2008 9:03 am Post subject: |
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brew wrote: | If you get audited you would likely lose the deductions and the IRS would hit you for back taxes, penalties, and interest.
You're perfectly capable of taking as a deduction whatever you want to. Virtually the only time it ever gets questioned is under audit. However, if you are reasonable with your deductions, you may never get audited.
That's why I stress the fact that you need to be reasonable with your deductions. If you're generating only a little bit of sales, don't try to deduct very much. If you're generating 6 figure sales, then you can probably slide by taking most of the boat usage. |
Understood. I'm not just looking to write off my boat expenses to some made up business. I run a couple monetized websites and pay out of pocket for content creation, advertising, etc. So if I use my own boat and camera and whatnot for content creation, its legit. Keep logs, times, receipts, it shouldn't be a problem. Don't go apeshit with the deductions, be reasonable, etc.
Thanks for the advice, all very helpful. _________________ WakeSurf and Wakesurfing News |
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