Cruisers Forum
 


Join CruisersForum Today

Reply
 
Thread Tools Search this Thread Rate Thread Display Modes
Old 04-07-2019, 17:27   #1
Registered User
 
Davidhoy's Avatar

Join Date: Jul 2016
Location: Hollywood FL
Boat: Catalina 470
Posts: 898
Home office tax deduction for liveaboards.

I recently started living aboard my Catalina 470, currently in a marina in South Florida, but later further afield. I work from "home", and use part of my boat (mostly the nav station) as my "office". Can I take a deduction for part of the marina fees, utilities, and Internet connection? I know I can do this with a house, and hopefully it's no different now that my home is floating.

Ultimately I need to talk to a tax professional, but it helps to have a basic idea of what's possible, hence the question.

-David
__________________

__________________
Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.” – Mark Twain
Davidhoy is offline   Reply With Quote
Old 04-07-2019, 18:17   #2
Registered User
 
S/V Illusion's Avatar

Join Date: Oct 2007
Location: Lakewood Ranch, FLORIDA
Boat: Alden 50, Sarasota, Florida
Posts: 2,125
Re: Home office tax deduction for liveaboards.

Talking to a tax lawyer is the best idea but when last I did that, she said the space has to be used “exclusively” as work space. A nav station likely doesn’t pass the “laugh test” to an auditor.

She also warned (three years ago) that home office deductions are one of the first triggers for an audit.
__________________

S/V Illusion is offline   Reply With Quote
Old 04-07-2019, 18:30   #3
Registered User

Join Date: May 2008
Posts: 2,291
Re: Home office tax deduction for liveaboards.

"In a 1994 tax court case, TC memo 1994-27, Dr. Salih was denied a home office deduction for failure to provide evidence that an office containing a television and a VCR had no personal use."

If you can't have a TV in your home office, I'd love to see the expression on the IRS auditors face when you show him your nav station.

https://www.thebalancesmb.com/how-ca...t-proof-398589
CarlF is offline   Reply With Quote
Old 04-07-2019, 18:32   #4
Registered User
 
Fore and Aft's Avatar

Join Date: Jan 2015
Location: Gympie
Boat: Volkscruiser
Posts: 731
Re: Home office tax deduction for liveaboards.

Could you call the yacht "Home Office" and deduct everything? LOL
Talk to your tax professional and see what he says. Anything business wise I always check with my accountant first. Much cheaper than having to pay the money back later.
Cheers
Fore and Aft is offline   Reply With Quote
Old 04-07-2019, 19:38   #5
Senior Cruiser
 
skipmac's Avatar

Cruisers Forum Supporter

Join Date: Oct 2007
Location: 29° 49.16’ N 82° 25.82’ W
Boat: Pearson 422
Posts: 13,953
Re: Home office tax deduction for liveaboards.

I work from home and boat (although haven't tried to expense the boat yet) and my accountant also warned me that deducting for a home office is a trigger for audits. However she deducts the percentage of the house I use for work and I end up with about the same benefit.



I'm not exactly sure how she does it but we have been doing it for years with no problem. Maybe deducts the use of the house as a business expense instead of a home office. Ask your accountant.
__________________
The water is always bluer on the other side of the ocean.

Sometimes it's necessary to state the obvious for the benefit of the oblivious.

Rust is the poor man's Loctite.
skipmac is offline   Reply With Quote
Old 05-07-2019, 04:55   #6
Registered User
 
denverd0n's Avatar

Join Date: Jun 2008
Location: Tampa, FL
Posts: 4,420
Images: 6
Re: Home office tax deduction for liveaboards.

Quote:
Originally Posted by S/V Illusion View Post
...the space has to be used “exclusively” as work space.

...home office deductions are one of the first triggers for an audit.
This ^^^

Talk to your tax advisor, but I strongly suspect that the advice you will get is, no, you cannot take any deduction for doing some work at your nav station.
denverd0n is offline   Reply With Quote
Old 05-07-2019, 09:04   #7
Registered User
 
taxwizz's Avatar

Join Date: May 2013
Location: Toronto
Boat: Small yellow rubber ducky
Posts: 506
Re: Home office tax deduction for liveaboards.

Quote:
Originally Posted by S/V Illusion View Post
Talking to a tax lawyer is the best idea but when last I did that, she said the space has to be used “exclusively” as work space. A nav station likely doesn’t pass the “laugh test” to an auditor..
A tax lawyer will likely charge about 4 times as much as a CPA and not give any better advice at your level of complexity.
Just sayin'
taxwizz is offline   Reply With Quote
Old 05-07-2019, 09:24   #8
Registered User
 
S/V Illusion's Avatar

Join Date: Oct 2007
Location: Lakewood Ranch, FLORIDA
Boat: Alden 50, Sarasota, Florida
Posts: 2,125
Re: Home office tax deduction for liveaboards.

Quote:
Originally Posted by taxwizz View Post
A tax lawyer will likely charge about 4 times as much as a CPA and not give any better advice at your level of complexity.
Just sayin'
this is a legal assessment, not an accounting one and my experience is the two are often mutually exclusive. No offense but accountants are accountants unfamiliar with tax code case law.
S/V Illusion is offline   Reply With Quote
Old 05-07-2019, 09:29   #9
Registered User
 
taxwizz's Avatar

Join Date: May 2013
Location: Toronto
Boat: Small yellow rubber ducky
Posts: 506
Re: Home office tax deduction for liveaboards.

Quote:
Originally Posted by S/V Illusion View Post
this is a legal assessment, not an accounting one and my experience is the two are often mutually exclusive. No offense but accountants are accountants unfamiliar with tax code case law.
I disagree. Any CPA in a tax practise takes several Professional Development courses each year and is well aware of tax and audit issues and laws. We are required by our professional associations to keep up to date.

(I am a CA, CPA in Canada, but assume that the requirements are similar in the USA and elsewhere)
taxwizz is offline   Reply With Quote
Old 05-07-2019, 16:37   #10
Registered User
 
Davidhoy's Avatar

Join Date: Jul 2016
Location: Hollywood FL
Boat: Catalina 470
Posts: 898
Re: Home office tax deduction for liveaboards.

Thanks for all the opinions. As I said upfront, I fully intend to get professional advice, so all the suggestions to do that were moot. It's hard to dedicate any particular space to just one activity on a boat, and it sounds like the IRS can be pretty anal.

For the curious, attached is a picture of my nav station/home office...
Attached Thumbnails
Click image for larger version

Name:	IMG_3418.jpg
Views:	44
Size:	419.4 KB
ID:	195407  
__________________
Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.” – Mark Twain
Davidhoy is offline   Reply With Quote
Old 05-07-2019, 17:12   #11
Registered User
 
S/V Illusion's Avatar

Join Date: Oct 2007
Location: Lakewood Ranch, FLORIDA
Boat: Alden 50, Sarasota, Florida
Posts: 2,125
Re: Home office tax deduction for liveaboards.

As the max allowable deduction is $5/sq ft, I’m not sure how large your nav station is but I suspect we’re discussing the price of dinner at a restaurant.
S/V Illusion is offline   Reply With Quote
Old 06-07-2019, 06:25   #12
Registered User
 
taxwizz's Avatar

Join Date: May 2013
Location: Toronto
Boat: Small yellow rubber ducky
Posts: 506
Re: Home office tax deduction for liveaboards.

Quote:
Originally Posted by Davidhoy View Post
Thanks for all the opinions. it sounds like the IRS can be pretty anal.
Some people even think that they are paid by commission.
taxwizz is offline   Reply With Quote
Old 06-07-2019, 06:33   #13
Are you serious?
 
sailorboy1's Avatar

Cruisers Forum Supporter

Join Date: Jul 2007
Location: On the boat somewhere
Boat: Hunter 410
Posts: 15,218
Re: Home office tax deduction for liveaboards.

I see no way to convince anyone that the space on a boat you use to "work" isn't also used for something else. If you tried you better be ready for "The Letter".
__________________
jobless, houseless, clueless, living on a boat and cruising around somewhere
sailorboy1 is offline   Reply With Quote
Old 06-07-2019, 06:43   #14
Registered User
 
Davidhoy's Avatar

Join Date: Jul 2016
Location: Hollywood FL
Boat: Catalina 470
Posts: 898
Re: Home office tax deduction for liveaboards.

Quote:
Originally Posted by S/V Illusion View Post
As the max allowable deduction is $5/sq ft, I’m not sure how large your nav station is but I suspect we’re discussing the price of dinner at a restaurant.
Quote of the day!
__________________

__________________
Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.” – Mark Twain
Davidhoy is offline   Reply With Quote
Reply

Tags
liveaboard

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Need IRS tax advice for casualty loss deduction (not hurricane-related) rgesner Dollars & Cents 10 05-08-2018 13:51
Personal Property Tax for Liveaboards lancelot9898 Liveaboard's Forum 30 18-08-2017 21:18
Confusion About 'Use Tax' and 'Sales Tax' thelasthour Dollars & Cents 31 28-02-2012 15:16
'Tax Free' or 'Tax Hassle'? MartinW Dollars & Cents 0 11-01-2012 12:12
Sales Tax and Use Tax - What the...? jpemb7 Dollars & Cents 7 18-01-2010 21:04



Copyright 2002- Social Knowledge, LLC All Rights Reserved.

All times are GMT -7. The time now is 04:47.


Google+
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2019, vBulletin Solutions, Inc.
Social Knowledge Networks
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2019, vBulletin Solutions, Inc.

ShowCase vBulletin Plugins by Drive Thru Online, Inc.