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Tax value of a cruise?

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boatingbob
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Tax value of a cruise?

Postby boatingbob » February 24th, 2016, 5:39 pm

Hi All!

Here's an odd question for you: some friends asked if we'd be willing to host an afternoon cruise on our Carver 390 CPMY as an auction item for a local choral groups fundraiser auction. They mentioned that I could write off the value of the excursion as a charitable deduction.

I'm intrigued, but I'm not sure what value to put on it. Obviously there's the estimated fuel burn, but I'm sure I could (and should) factor in an amount for wear & tear, cleaning of the boat, etc.

Has anyone done something like this, and if so, what tax value did you put on it (and were you audited?)?

Thanks!

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waybomb
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Re: Tax value of a cruise?

Postby waybomb » February 24th, 2016, 6:23 pm

Talk about opening a can of worms if one of those people were actually injured or allegedly injured.
Be careful with this.
I also wonder how that works out when the passenger paid for the trip. Is that the same as a charter even though you are not paid? Do you have a license?

Sorry for a cynical response.
Thanks
Fred
1964 Barron Flatbottom with BBC Chevy
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After Taxes
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Re: Tax value of a cruise?

Postby After Taxes » February 24th, 2016, 7:56 pm

Fred gave you wise words.
As for charity, you can only deduct the amount that is on an official donation receipt from a registered charity. The Feds are unlikely to accept a dollar number that you make up.
I'm currently in the income tax business.

That said, the idea is horrendous in terms of liability to you personally and may invalidate your standard personal-use watercraft insurance policy.
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feeez
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Re: Tax value of a cruise?

Postby feeez » February 24th, 2016, 11:10 pm

This deal should get covered in "10 foot pole marks". The Lawyers would be salivating if something ever went wrong. I would stay away from that one.
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Re: Tax value of a cruise?

Postby tomschauer » March 30th, 2016, 12:17 am

Hi Bob. If you carry passengers for "hire", the hire being a tax deductible expense, you would need to have a coast guard captains license for the number of passengers. A "6 pack " license is the most common allowing you to carry six passengers.
As the others have noted, insurance will also be an issue. If you read the fine print on your policy, I am certain you are not covered as charter of for hire vessel, or you would not be asking this question. As such, if anything were to happen your insurance company would not be liable, leaving you and your personal assets to foot the bill.
Unforunately, it not always the best idea to be the nice guy.
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Lyndon670
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Re: Tax value of a cruise?

Postby Lyndon670 » April 2nd, 2016, 4:27 pm

Well said Tom. In Canada, it is a Master's Limited license as minimum requirements anytime carrying passengers for hire. I am currently in the process of completing the mandatory hour requirement for the Masters after completing the classroom and practical exams in 2015.

Without anything going wrong, you could be in a world of hurt from enforcement officers without being properly licensed.
Lyndon,
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jporta
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Re: Tax value of a cruise?

Postby jporta » April 12th, 2016, 12:28 pm

I have done this a couple of times for the local school. After talking to my insurance and Coast Guard, It came out that as long as you personally don't derive any financial benefits it's OK to do it and it is legal.
Just to make sure, ask your insurance and local Coast Guard office.
For sure, no tax deduction.

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