Any Tax Experts Out There?

[sailing_gal]

I am not a resident of CA, and never practiced there, but in Illinois and in Maryland, when you did not agree with the tax assessor's valuation of your property, you could submit a valuation by a licensed appraiser (in this case, surveyor) and submit it to the assessor's office and they accepted it with no argument. I do not know the law in CA, but I would contact the tax office and ask if you could bring in a qualified appraisal to challenge the assessment.

[EmeraldCoastSailor]

Holy cow, that sure doesn’t seem right on multiple levels.

[letsgetsailing3]

The part that doesn't sound right is that the boat depreciated to 1/3 of it's value over 15 years.

If you really think the value is wrong, you can certainly get it appraised.

Whatever method they're using should be consistent.

[joelhemington]

Originally Posted by S/V Illusion

It’s California. The majority there voted for more taxes.

Unfortunately, the majority of voters here do not have citizenship or pay taxes

[Woodland Hills]

Twenty million voters in California are the majority of them illegal? Everyone in California who has a job pays payroll taxes even if not making enough to owe income tax.

[waterman46]

Originally Posted by S/V Illusion

It’s California. The majority there voted for more taxes.

Every ballot initiative, local or state, that will sell more bonds or add property taxes, in CA, is always approved by the voters. The majority of voters are renters and many live in rent-controlled areas, and they just don't get the long-term effect on rents due to increases in taxes.

Anyway, you need to understand that depreciation as a tax item has nothing to do with real-world market price. Housing used for rental purposes is always depreciated every year, even though the market value increases with time. The concept of depreciation was intended mostly for capital expenditures for business equipment. Equipment actually does depreciate and lose value over time, so it's fair for the tax to be reduced year by year on those items.

Rental real estate, airplanes and boats get taxed the same way. It is actually a tax break for real estate since the market value keeps going up. (Unfortunately, real estate owners have to pay huge capital gains tax when they sell since the depreciated value is way below market value.)

But the starting value is always the first day you put business equipment into service. Or when you take possession of the real estate. Or bring a boat into the state after changing registration to another state. So they use it's true market value at that time.

[boatpoker]

Originally Posted by nhschneider

When we bought out boat in 1996, our county tax assessor immediately started sending us an annual bill for property tax at a rate of slightly over 1% of the boat's value. As a benevolent gesture, he also started depreciating the boat to the point of 15 years later, it's value was less than a third of what we had paid for it. Then, we went sailing for eight-and-a-half years and when we returned, our greedy tax assessor assigned a new value of the boat which is almost three times what it's depreciated value had been before we left. His sidekick wrote me an email when I complained that said the BUC value of the boat is what they used to determine its value.

Of course, I can appeal the valuation but I was hoping I could be 'forearmed' with some advice by a friendly Forum member. Any ideas?

Fair winds and calm seas.

Read this article on my website and then PM me with your email address, the model and year of your boat. I will send you a copy of the soldboats.com report on that model.

We are currently boondocking through Texas and only occasionally have WiFi but I will get it to you.

PS. BUC is absolute bunk !

How much is she worth, boat values, a crap shoot

[Larry Florida]

When I was a kid Cali was a mecca. Now just a sad story.

[belizesailor]

Originally Posted by Capt Jerry

I don't know how much the tax is (and that will decide whether this is a practical solution) but form a corporation or llc to own the boat in a state that doesn't tax boats as personal property- convey the title to that entity and voila.
You should run this by your attorney first.

If the boat physically resides in California then it wil still be assesed tax regardless of where the entity is that owns it.

[roverhi]

In California, had the County Assessor value my boat at 1/3rd more than what I paid for it. Appealed the valuation with the sales contract purchase value and a list of reasons the boat was less valuable than their assessed value, one of which was the boat was 40 plus years old and anything else I could think of to justify what I paid for it. They accepted my value for the boat without further issue. Put a lot of money into the boat and pretty much turned it into a new boat but never heard anything more on the value from the assessor.

On my current boat will be appealing the now current valuation as they claim the boat is appreciating. See how I make out on that as the only thing I've done is clean the boat up and buff out the exterior.

[Brewgyver]

Originally Posted by S/V Illusion

It’s California. The majority there voted for more taxes.

Not lately. There was only one bond measure on the March ballot, a $15 Billion bond for "school construction" that wend down ~ 54 to 46. First time in 26 years that a school construction bond measure failed.

[Brewgyver]

Originally Posted by Larry Florida

When I was a kid Cali was a mecca. Now just a sad story.

Unfortunately, it's still a "Mecca," without intending any reference to Islam. It's a Mecca for hundreds of thousands of deadbeats, drug addicts and habitual criminals.

I was born here, and except for my service years have lived my 60+ years here. If you didn't know better, you'd think this state was in the southern hemisphere, because it's as it goes down the drain it circles to the left.

Back to the original post, Ventura county certainly hasn't been depreciating my boat's value at anything like what you experienced in the past, so perhaps it's just evening out. I do wish you luck, but you know what they say about the two things in life you can't avoid...

[letsgetsailing3]

Sort of like the reverse of Sanford and Son.


On Sanford and Son, the motto was "We buy junk. We sell antiques."


With some boaters, it's "My boat is junk" when talking to the tax man, but "My boat is a pristine, updated antique" when talking to a potential buyer.

[Gregbenner]

I’m retired, but California does base Property taxes based on fmv, not depreciated value. Specific protection for real property (prop 13), but I don’t think it applies to personal property (?). Assuming you are currently a resident of California, forming an LLC in another state most likely won’t help, You’ll need to register the LLC in CA, pay an annual fee, etc.

Protesting a valuation is relatively easy, although procedurally can be complicated. This of course assumes the actual market valuation is over stated.

California taxes are high, but come July August September, its well worth it. (This from someone who moved from California to Florida, and back to Oceanside)

It probably will depend upon a combination of how much money you’re actually talking about (a few hundred or a few thousand), and whether or not you think their valuation is substantially overstated,(It’s not particularly difficult to get low valuations for the older boats). Best of luck

[cuthbert]

Originally Posted by joelhemington

Unfortunately, the majority of voters here do not have citizenship or pay taxes

I like that comment, its funny and non PC.

My two pennies, boats are like rental cars. Car rentals can be taxed highly as there is little pain for the elected officials, voters in a district don't rent cars its an out of town/out of state thing. Similarly the boat owners are such a small percentage of voters and boat purchase is a discretionary spend so its ripe for taxation. As a LA County water displacer, I do like the letter every year requiring affirmation of ownership and location along with my signature, then the polite confirmation response email that said declaration has been received and the invoice received thereafter showing the breakdown of taxes.

I never knew LA County carried so much debt for schools.

To the OP, just pay up. My all means send a letter rejecting the valuation but I fear it will not work and you may look upon it that you do enjoy the scant benefits of water borne services provided by the taxing authority, would you rather this was paid by.....who?

As many always suggest to any given problem, you could of course lawyer up, and they must be hurting with everyone being at home and not breaking the law or being out and about and getting in each others business. I'm sure any lawyer would take a $5k retainer to try save you a few hundred.