Buying out a boat partner - the tax consequences?

[SoonerSailor]

I'm giving some thought to buying out my equal boat partner. From the legal/tax point of view, could it be as easy as a "quitclaim"? Can you avoid having to "buy" the boat and pay sales/use tax again, or to tax authorities is it just like buying another boat for 1/2 price?

Thanks

[MVNoPlans]

This answer is generic since I don't know where you are. You and "partner" are likely both listed on the title currently. Draw up a bill of sale stating the interest being purchased and the price. The title will generally have a spot on it for the seller to sign away his interest. Go to your jurisdictions' registry or here in Washington it would be the Department of Licensing with the title and bill of sale. Here (in WA.) you would pay tax on the 1/2 interest that was purchased and sold. Easy.
You didn't mention that the boat was owned by an LLC so I will skip that for now.

[belizesailor]

I would discuss with an accountant in your venue/registration State of the boat.

I almost got dinged sales tax for transfering a boat in FL once, with no exchange of funds, in the end they were nice about it, but technically could have nailed me. Laws vary by State so best to be sure.

[SoonerSailor]

Thanks for the thoughts. Looks like I'll be up for the tax on half.


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[roverhi]

Depends on the State. Some States don't tax private sails of second hand goods. California and Washington are not one of these. Check with your local tax authority.