boat discount if i can pay some of the sum by cash by hand

[Frank 101]

Originally Posted by ers61

hi, i'm in the process of buying a boat now and one of the sellers (which is a charter company in europe) offered me discount if i can pay some of the sum by cash by hand / private account. I'm not in EU and I know that there are some TAX exemptions on the boats if sold outside the europe but I don't understand the point of having part cash. I guess I'll receive a bill less then the actual amount but my questions are:

1-Is it safe to do ? How should be the agreement ?
2-Will this have any side effects later on me later ? Like lower invoiced amount of the boat?
3-What is the financial benefit of this to the seller ? how much do they save ?

thanks.

Most of you didn’t read the op’s comments - “cash by hand / private account”, also it’s a “Charter company” supposedly selling the boat.
Is it safe to do so - probably not to put money into a “private account”. Why? Because it is traceable by the tax office in that country. You are part of a fraudulent transaction so could be held accountable by law.
Is it safe to do so “by hand”. As everyone else has said - stay away from it and pay the asking price to the charter company. Think of the repercussions if you were caught and convicted!
My opinion is that it probably just tax avoidance on the part of the company (not money laundering). The owner or whoever is selling the boat wants to pocket the cash and not pay tax on it.
Frank

[Tellie]

Just in case I did not make myself clear. A simple question to ask, as I do when ever cash payment is proffered for a reduction in tax. If I get caught by the IRS (and they ain't stupid by any stretch of the the imagination) will you be willing to then pay the tax you should have PAID in the first place, ALONG with the penalties I will incur if caught by the IRS?. I assure you, when you get audited, the cash buyer will NOT be there to offer you the payment for penalties. Again, I state everyone pays their share of taxes in any transaction they do with us. If that doesn't work for you then I'm sure there are plenty of other shady characters out there that are willing to play your game. I'm in it for the long run. If you can, and willingly, want to cheat the authoritative government in charge, I can only ascertain at that point that you would be more willing to do the same to me. At that point I'm no longer interested in dealing with you as a customer. If you don't like the tax laws there are certainly ways to change those laws legally. Asking me to be part of your scam to defraud any government is not going to fly, AT ALL. I don't care what anybody says about how it's possible to go cruising on $39.95 a month. I won't help you scam anyone, so please, PLEASE, don't ask me to in some sort of "We stuck it to the man" scheme.

[BruceS]

This question can be/is dependent on the country & it's many 'rules'.
eg. In Australia the GST (good & Services Taxation) comes into play.
Buying a charter boat has no GST component UNTIL the owner sells it to someone that has no GST exemption. (private personal etc)
Selling for a 'much lower' price reduces the 10% GST.....

Been there, done that!
Then there is the case of a seller retiring on the pension but wants to stay under the assets test....
There can be a lot of reasons..... just ask WHY?

[flyingw]

Originally Posted by Tellie

Just in case I did not make myself clear. A simple question to ask, as I do when ever cash payment is proffered for a reduction in tax. If I get caught by the IRS (and they ain't stupid by any stretch of the the imagination) will you be willing to then pay the tax you should have PAID in the first place, ALONG with the penalties I will incur if caught by the IRS?. I assure you, when you get audited, the cash buyer will NOT be there to offer you the payment for penalties. Again, I state everyone pays their share of taxes in any transaction they do with us. If that doesn't work for you then I'm sure there are plenty of other shady characters out there that are willing to play your game. I'm in it for the long run. If you can, and willingly, want to cheat the authoritative government in charge, I can only ascertain at that point that you would be more willing to do the same to me. At that point I'm no longer interested in dealing with you as a customer. If you don't like the tax laws there are certainly ways to change those laws legally. Asking me to be part of your scam to defraud any government is not going to fly, AT ALL. I don't care what anybody says about how it's possible to go cruising on $39.95 a month. I won't help you scam anyone, so please, PLEASE, don't ask me to in some sort of "We stuck it to the man" scheme.

It does not really affect the buyer, the seller is the one "probably" trying to avoid cap gains or possibly (in the US model) recaptured depreciation which is at ordinary rates. If you are presented a receipt that does not show your cash "bump" then that is exactly what is happening. This is illegal, but you're not your brother's keeper, so to speak.


If you are planning to use the boat as some sort of depreciating asset for tax purposes, then you will eventually eat the difference that you save today in a lower basis to show as a loss when you sell the boat you're trying to buy. If you're just going to use it personally, then let your conscience be your guide.


However, if the seller is ok with asking a stranger to help him defraud his government, how believable is anything else he's represented to you, the buyer?

[jmschmidt]

Sounds like a good way to get the FBI, DEA and IRS all knocking on your door.

[flyingfin]

a) You show up with cash
b) Seller gets stuck in traffic
c) bad guy shows up with gun
d) You get relieved of cash
e) Seller still has boat and moves on to next "Buyer"

[lazydove]

I would walk away from this "deal" if the seller insists on a cash-payment. Used to be a common practice but times have changed.....many years ago. Today it can land you and him in deep trouble.

[valhalla360]

Had a similar issue...selling our US boat to an EU citizen with the boat in Spain...guy wanted to hand us cash in US dollars.

He couldn't come up with a reasonable explanation for why. We even suggested he take the money and get a cashiers check/money order, kept coming up with excuses.

We walked away from the offer. It wasn't worth it.

[krissteyn]

I bought and sold my EU registered boat with 2 sale agreements.
The hull and fixtures were sold on one invoice , and all the non fixtures on another.
This reduced the potential taxes legally .
I’m sure some would argue this was fraud , but we obeyed the letter of the law.

[krissteyn]

In addition , paying the commission to the broker separately will reduce the potential taxes.

[valhalla360]

Originally Posted by krissteyn

I bought and sold my EU registered boat with 2 sale agreements.
The hull and fixtures were sold on one invoice , and all the non fixtures on another.
This reduced the potential taxes legally .
I’m sure some would argue this was fraud , but we obeyed the letter of the law.

If you sell at legitimate prices...maybe.

If you sell what should be a $200k boat for $50k and claim the dishes in the galley sold for $150k...don't expect it to hold up if the tax man comes to check out why the boat sold for little.

If you credit the misc gear at a more legitimate say $2-3k, that can be legitimate but won't have a big impact on taxes.

Manipulating sales prices for the sole purpose of evading taxes, doesn't fall under the heading of legal.