Lots of interesting comments in this thread...
The issue for someone considering some sort of charter
company approach for owning a boat, is that there are so many programs, and one size (or generalization) doesn't fit all.
Some of these comments are appropriate to some of the programs but not for others.
Time and space are too limited here, but, as the founder of the Boat as a business program, with over 700 successful participants since 1972, I'll just offer a couple of comments.
- 1. I would never promote this program as just an investment, or a tax avoidance scheme. It isn't either.
- 2. This program is, ideally, for someone who wants to end up ultimately owning a boat--either the one he is pursuing now, or he sets a plan in place to roll a first boat over for another--ultimate boat.
- 3. When structured properly, your boat business can qualify for legitimate tax benefits--just like any other business. In over 40 years of offering this particular and unique program and with over 700 successful participants, I have never heard from one who was specifically targeted by the IRS for their "Boat Business". Having said this, there are many I.R.S. guidelines we've learned over the years, from talking to 100's of tax advisers, that need to be followed, in order to share this in this proven successful program. This is what we share in our Webinars and when we talk to people (Given a little more time than we typically have at boat shows where we can only introduce the topic.)
- 4. No matter what tax bracket you're in, there are some tax advantages that apply. They're not mysterious. They're the same ones that apply to any business. You just need to understand and follow a few I.R.S. guidelines--which we carefully explain, when given the time to do so, at one of our webinars, through our website, or over the phone.
- One of the members said that this was a "Passive" activity and there were no tax advantages. This is a generalization that applies to some (perhaps, even most) of the programs, but not to our Business Yacht Ownership program which is structured differently and appropriately so an owner can qualify for active (business) tax advantages.
- 5. The basic concept is that if you just rely on income, as one member commented--you need to charter your boat more than you would like. But, if you qualify for significant tax advantages as well, the so called active (business) tax advantages (i.e. , you are in a personal tax bracket that requires you to pay the tax man more than you would like) --you don't need to charter nearly so much--depending on what your goals are--and, believe me, it's all about meeting your individual goals, and no program fits everyone.
- 6. The seven hundred successful participants don't lie. (And, you can talk to some of them). They were not geniuses. They just took the time to drill down deeper. You don't have to re-invent the wheel. Do what all successful businesses do--pick a good model, and copy it (or the best parts of it, or the parts that work for your situation).
If you're the right fit--there is no less expensive way to own, or build equity in a new boat--in part because you can divert some of the taxes
you're already paying into equity in your new boat. I sometimes say, you're already paying for a new boat, you just don't have it! You're paying for it with taxes
you're paying IRS already, over which you have no control. Now you can change that equation.
This program isn't for everyone--it's best for those that want to own a pristine boat where preventive maintenance
is emphasized. For those who care about this boat, the boat they will eventually own at the end of the program. Their boat, in this unique, casual charter program, will experience less wear and tear, and it will maintain its resale value--similar to a privately owned boat.
Typically, our owners just don't have the time and, often, don't want to commit the resources (money) a typical private owner commits to--right now. They have found that this approach results in the lowest possible cost of ownership--its less expensive than a time-share or fractional ownership
program. Our program results in an even less expensive approach than owning a used boat
You can't generalize. Virtually all of the offerings have different goals, outcomes and advantages and disadvantages. (We have prepared a paper with a comparison using publicly available information. Ask for it.)
When participating in our program, regardless of tax bracket you can expect to reduce cash flow 75 to 100% and many even make a profit. The program is flexible, with many variables and your choices affect your probable cash flow. Our program is time tested, and makes perfect sense, once you understand all aspects of it.
Please feel free to contact me, or join one of our webinars if you would like further information.
Eric Smith, Bay Yacht Agency--Founder of the "Business Yacht Ownership program" -- An interim, casual charter program for private boats, managed by experienced, boutique, private management companies.