taxman cometh

[Chrisfromnc40]

I think I might have screwed up with how I registered my boat.
I registered it with the USCG documented under our LLC.
We keep it in Charleston SC. We pay SC property taxes but pay higher - 10.5 % because we have the boat listed in our business. We could have in under our name (homestead exemption) -if something terrible happened, someone got hurt, we would be personally liable. What are your thoughts on this - going with a more affordable way to sail and pay the taxman. Thanks in advance.
CW

[S/V Illusion]

You may have a false impression of liability. States differ somewhat in probate law, however, none with which I am familiar isolate corporate officers from certain liability.
Further, with the same caveat, there is no specific nexus between homestead tax provisions and boat ownership. While some claim it as a “home”, that is recognized in many cases as a simple tax dodge as the vast majority of tax audits have found.
Nothing wrong with minimizing tax burden which i presume is why you ask but recognize it usually comes down to ‘follow the money’ as in who paid for the boat - you or the LLC.

[Chotu]

Originally Posted by S/V Illusion

You may have a false impression of liability. States differ somewhat in probate law, however, none with which I am familiar isolate corporate officers from certain liability.
Further, with the same caveat, there is no specific nexus between homestead tax provisions and boat ownership. While some claim it as a “home”, that is recognized in many cases as a simple tax dodge as the vast majority of tax audits have found.
Nothing wrong with minimizing tax burden which i presume is why you ask but recognize it usually comes down to ‘follow the money’ as in who paid for the boat - you or the LLC.

All of this is accurate.

You’re trying way too hard. Get insurance to mitigate the risk.

[CarlF]

If you're in command of the boat - or even on it - you'll be named in the suit as an individual. The LLC only provides liability protection if the LLC charters the boat to someone else and you are nowhere near it when the accident happens. Even then, they'll try to sue you as an individual. Doesn't take much - it can be enough if there's an email from you to the charterer that uses your name rather than the LLC name.

That's why it's important that you (and your wife) be named as insured on the boat's insurance policy that lists the LLC as owner. There's usually no charge for this.

If own a house or car with an umbrella liability policy have the boat listed. My homeowners insurance company is willing to do this for no charge even though the boat policy is with a different company. They do want the boat policy liability to be above the umbrella's minimum.

Given how unlikely it is that the LLC will protect you, if putting it in your name would legally save some tax - I'd do that.