My wife and I are building a house leter this fall, so the 19-foot Key West will be sold shortly. Since I started fishing in the Race and Fishers Island Sound, I feel like the boat is too small anyway.

My wife and I know that we will miss the boat terribly, so I'm trying to think of ways to fit a 21-footer or so into my budget. I was thinking that if I get my 6-pack license from the Coast Guard, I could declare myself a professional guide. Then, if I charged my friends a few bucks each time we go out, there might be all kinds of tax write-offs that would help offset some of the costs of boat ownership. I figure I could depreciate the boat, plus write off all the expenses (gas, marina, insurance, tackle, use of truck). If I could use those write-offs to cut down my costs (even just a little), that might make the difference between being abkle to afford it or not.

Has anyone else looked into this?

Uhhhhh, be careful.

Methinks the IRS, having read this thread (who knows) will want to challenge your status as a "bona fide" guide.

-WW

it will work, but a word of warning, you had better make a profitt after 3 years or its audit time.

yep, they will consider it a hobby if it doesn't show a decent profit. capesams is right.
I just asked my accountant about something like this last night.

Here's what put the idea in my head:

I have a friend whose parents have a house that is on Killington Mountain. They rent it maybe a half-dozen times throughout the year. The rental income that he gets only covers maybe 2 of his mortgage payments. But because he uses it to generate income, he gets all kinds of write-offs. Not enough to pay for his house certainly, but he is able to offset his out of pocket expenses a bit. The house will never even come close to producing a "profit", but he's able to save a little money.

That's all I was looking for. Appreciate the feedback, I figured there had to be a catch.

Renting property is completely different than operating a business as far as the IRS is concerned. Apples and oranges.

Your plan, as laid out, will NOT work. What ya got there is a hobby. Losses are non-deductible.

Take my word for it. I know.

There's an article in Marlin magazine (last months) about a similiar scenario. Some of these tournament fishermen are writing off their loses against their "real" earnings. The IRS frowns on this! As a matter of fact they could turn your plan into a disaster and tax you on the market price of your charters. Also setting up a corporation has many hidden costs such as higher commercial insurance rates, lawyer/accountant fees etc. If you want to register the trailer the corporation must own a car as well (in MA)

Take my word for it. I know.

He knows!! :)