Any CPA's here? Deduction question

[Passages]

If you take out clients, you can deduct the actual costs of the outing. Fuel, food, bait etc.

The Coast Guard has lightened up on it's definition of a Charter. If you go out fishing with your buddies, it's now OK to share costs of the trip. You just can not make a profit.

[Bill Allen]

I have two boats, one I run as a dive boat and one my boat. I never use the dive boat for my own use. Deduct all expenses on it. Mine I pay all the bills, we set it up this way as my accountant at the time felt boats always raise a flag as there is so much cheatting attempted by tax payers. I hear all the time how people are getting their ticket so they can deduct there boat. Way to much record keeping for me. Bill

[Genesis]

Yep. Trying to deduct boat expenses (beyond direct fuel costs for an outing and perhaps catered food) is asking for it. If I regularly took clients out fishing (not as a charter, but as a person) as a means to "grease" a business deal you can bet I'd deduct the fuel under the T&E line item though - that's a VERY defensible deduction provided that ALL the people on the boat (other than you!) were clients.

I'll take the risk of an audit on that one, given how much money is typically involved, but I don't believe you'd get hit there. Just keep your documentation in order and DON'T stretch it, because you very well may end up getting audited. Likely you'd get hit with a correspondance audit on that one if it was fuel related only, and a copy of your receipts with a notarized statement to the effect that the fuel expended is (1) ALL you're claiming, and (2) those trip(s) on which the fuel was consumed were EXCLUSIVELY for business purposes would probably put an end to it.

Maybe.

Now if you tried to do the "apportionment" thing with a boat that wasn't EXCLUSIVELY for business I suspect you'd get nailed immediately and they'd likely, in the end, disallow ALL maintenance and slip costs - basically everything EXCEPT the direct costs of the voyages used for client enticement.

Their argument is going to be that you'd eat those expenses even if you never used the boat for business at all.

And they'd be right.

One thing that my CPA told me years ago - don't even THINK about trying to claim the home office deduction, although since I sold my ISP I absolutely have a defensible claim to it. Its a nearly sure-fire audit trigger and unless you're willing to defend it every year its not worth it. Since the total I could deduct is relatively modest anyway I don't bother trying it.

[SKYCHENEY]

Yes, and then there is the alternative minimum. That rule is going to disallow most of your deductions anyway. So, why bother. They have it figured out so that you pay one way or another.

[CARL GUZMAN]

I think as realtor you may have more leverage because you can show homes on the water with the boat. our percentage of waterfront sales is like 10% of gross sales but I do take out client almost once a month and show off Naples water front homes , and I do deduct expenses on those trips only...

Now I just need some one from the CDR get together to say we talked real-estate on that trip that was a bunch of fuel......