Charter captains will be getting crushed - Striper Talk Striped Bass Fishing, Surfcasting, Boating

keeperreaper · 03-12-2008, 08:52 AM

with the rise in gas prices. Most charter guys I know work their asses off for 6-8 hours on the water and then a few more after he trip to make marginal money in the big picture. How many people we be able to stay in business with their current prices. They have gas, insurance, equipment, bait, a note, and other misc. expenses to cover and the price point for the consumer is getting closer to the breaking point. If a 700 dollar trip becomes an 800 trip I'm sure a lot of clients will opt not to go fishing. I feel bad for the guys who are held captive by the rising oil prices. I'm also happy I didn't get my ticket punched 4 years to be a full fledged charter outfit. In this great country of ours it is getting harder and harder for the working class citizens to get ahead or have a little fun without mortaging his home for a second time to do it.
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MakoMike · 03-12-2008, 09:53 AM

It isn't getting any easier thats for sure.

beamie · 03-12-2008, 09:57 AM

Your correct Keeper, it will raise prices and some fares will opt out.. One thing to think about is most of the charter fleet are part timers, not thier full time real job. It is a side job. The "business" most times is operated as a big write off. Everything gets deducted as a cost of operating the business. From gas, gear, insurance... to the money spent on lunch for the day. Some of the years it is far in the red, thus they get a big deduction on thier taxes. They have to show a profit every so many years to make it legit. So this year will be a bigger deduction than last.....

Hooper · 03-12-2008, 10:55 AM

Quote:

Originally Posted by beamie

Your correct Keeper, it will raise prices and some fares will opt out.. One thing to think about is most of the charter fleet are part timers, not thier full time real job. It is a side job. The "business" most times is operated as a big write off. Everything gets deducted as a cost of operating the business. From gas, gear, insurance... to the money spent on lunch for the day. Some of the years it is far in the red, thus they get a big deduction on thier taxes. They have to show a profit every so many years to make it legit. So this year will be a bigger deduction than last.....

I'm with you Beamie, I will run a few this year only because it is a part-time endeavour. I hate to work extra at my real job, but, I need to work extra, thus a few charters. In my mind, after the expenses are paid for a day on the water and if I can make the same money I'd make doing the grind, well that's a no brainer. It's a good write off, and if I can break even some years or earn a few bucks, why not. Plus, I can justify the cost to myself and more importantly, the Admiral.

pmueller · 03-12-2008, 11:39 AM

On top of all this good news charter captains will have a new few from the DHS, some sorta of new transportation "registration-tax fee etc" for the privlege of not being a terrorist.

striperman36 · 03-12-2008, 11:44 AM

Quote:

Originally Posted by keeperreaper

with the rise in gas prices. Most charter guys I know work their asses off for 6-8 hours on the water and then a few more after he trip to make marginal money in the big picture. How many people we be able to stay in business with their current prices. They have gas, insurance, equipment, bait, a note, and other misc. expenses to cover and the price point for the consumer is getting closer to the breaking point. If a 700 dollar trip becomes an 800 trip I'm sure a lot of clients will opt not to go fishing. I feel bad for the guys who are held captive by the rising oil prices. I'm also happy I didn't get my ticket punched 4 years to be a full fledged charter outfit. In this great country of ours it is getting harder and harder for the working class citizens to get ahead or have a little fun without mortaging his home for a second time to do it.
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Huckmeyer now charges 195 USD to go out for an EXTENDED DAY TRIP
Thats alot of cod at 9 bucks a lb.

zacs · 03-12-2008, 11:50 AM

i am by no means an accountant, but be careful deducting these expenses if your business.

From what I have been told, the IRS dictates that your business has to make money in any 3 of the past 5 years. If not they will consider it a Hobby and you are screwed.

MakoMike, can you confirm?

beamie · 03-12-2008, 11:53 AM

That is right PMueller. Your going to need one.

Hooper and I have discusses this last month. It is called a TWIC. Tranpotation workers identification credential. Basically another $130 tax

. You can go online and make an appointment at the nearest TSA office to you. It really shouldn't apply to the small boat charter crowd however if you have a USCG license you are suppose to have one. Mine is pending at his time 6-8 week TSA backlog. I need it for my real job and chartering.

Hey, it is another deduction.......

Zacs,

Yes you have to keep good tabs. You do have to show a profit every so many years. On years when you are in the red and have to show a profit it is all creative book keeping. Not to mention the whole charter operation business is a partly a cash business. I have even seen short ads stating bring cash.....that isn't just because someone doesn't trust your check.

Mr. Sandman · 03-12-2008, 12:04 PM

The number of Charters are dropping as prices rise too and also the number of charter fishermen are increasing to subsidise their fishing/boating habit with easy license courses.

Most guys don't make any money running 6 pack charters, if they do it ain't very much and it is a lot of work and hassle. You can only write off to the extent you make, I don't think you can carry the loss into other earned income....I would like to hear if you guys do that. even so, Do the numbers this is not a good business and it looks to get worse before it gets better.

Even at today's prices 5-700 half-day 9-1200/full day overnight canyon around 3K or more it is hard to justify it as a consumer who wants to take his kid fluke fishing for a few hours, no less . The guys that are making some money are taking charters during the SB comm season and taking 30fish/day and selling them + the charter fee. This lasts for about a month and is viewed by many as wrong almost immoral.

While fueling up one day I spoke to a big boat owner who fish's the edge fairly often, he said last season that he burns $3000 in fuel ALONE for a single canyon trip. OK it was a big boat, (50' I think) but still, 3K for a single trip just for fuel? I guess since Spizer spent more then that for 4 hours with a hooker it doesn't seem that bad to people with that kind of cash.

The end of boating as we know it is in sight. The industry will collapse, there is no way they can find a short term fix to this. Mark my words I would estimate 50-70% of boating companies around today will be gone in the next 10 years.

...Actually there IS a short term fix but I don't hear anyone talking about it. DRILL FOR OIL IN THE US!!!! NOW

RIROCKHOUND · 03-12-2008, 12:11 PM

One way to look at it Jim, is that if it costs you 6K to keep a boat for the year; and you don't fish a ton, 5 $700 full day charters is ~1/2 the price of your boat...

I like Ed's idea, give me a displacement hull, diesel engine, and 10kt cruise; great for inshore

downside... 10hrs to the edge!!! ouch! at least you can hi-speed troll the whole way...

Mr. Sandman · 03-12-2008, 12:18 PM

Anyway we can rig out a 60' catamaran with a fighting chair? ...seriously.

http://www.yachtworld.com/core/listi...d=732210&pic=2

beamie · 03-12-2008, 12:46 PM

Sandman,

There is no more chartering legally while comm bassing. I am sure it is still going on but now against the rules.

I don't do any of these deductions myself. I work for other charter guys occassionally, not for myself yet. When I asked my tax gal in the past about it she mentioned showing a profit some years and losses. It is another schedule on your tax. "F maybe?" So the loss can come off other earned income.

Those Catamarans will probably start becoming allot more popular.

Hooper · 03-12-2008, 06:39 PM

Wow, this thread is demoralizing! Think I'll go take a warm bath and open a vein! I hope it isn't the end of boating as we know it.....

I have a friend who is very optimistic about the future. He believes that with the soaring costs of energy, there is huge incentive for the private sector to develop new means of producing energy, he believes there will be radical new technologies developed over the next 20 years. I can only hope he is right.

zacs · 03-12-2008, 08:16 PM

Quote:

Originally Posted by Hooper

Wow, this thread is demoralizing! Think I'll go take a warm bath and open a vein! I hope it isn't the end of boating as we know it.....

I have a friend who is very optimistic about the future. He believes that with the soaring costs of energy, there is huge incentive for the private sector to develop new means of producing energy, he believes there will be radical new technologies developed over the next 20 years. I can only hope he is right.

i agree with your friend. but it doesn't help me for this summer

Raider Ronnie · 03-12-2008, 09:04 PM

[QUOTE=Hooper;573836]Wow, this thread is demoralizing! Think I'll go take a warm bath and open a vein! I hope it isn't the end of boating as we know it.....

Thats a bit drastic Gordon !
But if you are serious, let me know ahead and I'll take that boat off your hands

Just kiddin

I'm hoping for a repeat of last year, didn't need to burn a lot of gas !
As for charters,
I think with higher gas prices, a lot of boat owners figure it's
cheaper to leave their boat tied up, get a group together to split the cost and book an affordable charter.

Gunpowder · 03-13-2008, 12:20 AM

Quote:

Originally Posted by Hooper

Think I'll go take a warm bath and open a vein!

An artery would end it quicker

thefishingfreak · 03-13-2008, 06:51 AM

times like these I'm glad I got rid of my grady.306 gallons and it loves fuel..I used to burn thru 180 gallons to fish stellwagen for the day..
Just not the same when your buddy throws you 20 bucks for fuel.

taJon · 03-13-2008, 07:25 AM

pmueller · 03-13-2008, 11:05 AM

The only positive I see with the gas price could be some folks just won't put their boat in the water, and opt for a charters. All of us that have boats know its alot cheaper to go on a half a dozen charters than to own and operate your self.

keeperreaper · 03-14-2008, 01:46 PM

$111.00 a barrel. Get the razors out, roll up the shirt sleeves.

MakoMike · 03-14-2008, 03:53 PM

Quote:

Originally Posted by zacs

i am by no means an accountant, but be careful deducting these expenses if your business.

From what I have been told, the IRS dictates that your business has to make money in any 3 of the past 5 years. If not they will consider it a Hobby and you are screwed.

MakoMike, can you confirm?

I don't remeber exactly what the rules is off hand, I think its one year out of the last six. But its a rebuttable presumption anyway, so if you can convince them you're in it for the money, whether you have a prfit or loss doesn't matter.

MakoMike · 03-14-2008, 03:54 PM

Quote:

Originally Posted by Mr. Sandman

The number of Charters are dropping as prices rise too and also the number of charter fishermen are increasing to subsidise their fishing/boating habit with easy license courses.

Most guys don't make any money running 6 pack charters, if they do it ain't very much and it is a lot of work and hassle. You can only write off to the extent you make, I don't think you can carry the loss into other earned income....I would like to hear if you guys do that. even so, Do the numbers this is not a good business and it looks to get worse before it gets better.

Sandy, If its a valid bsuiness loss you can deduct it against your other income.

fishonnelsons · 03-14-2008, 04:36 PM

My accountant told me to show a profit this year, my third year in business. The "hobby" rule is linked to the five year everyone has been talking about, but my guy strongly suggested to do it sooner than later. Everyone's situation is different, and with different risks - I would just say listen to what your person tells you to do, they're the experts.

MTC · 03-14-2008, 08:52 PM

This is why I dumped my $4000 dock space and will trailer my next boat (25' Contender) Trailer to the fish... save $1.00 per gallon on gas and load up and wash at the house... 1/2 mile from the ramp...

Roger · 03-14-2008, 09:42 PM

Quote:

Originally Posted by fishonnelsons

My accountant told me to show a profit this year, my third year in business. The "hobby" rule is linked to the five year everyone has been talking about, but my guy strongly suggested to do it sooner than later.

It's silly to do it sooner rather than later if you have a choice, but since the hobby loss rules require showing profit in 3 of 5 consecutive years, your accountant is right on time.

FWIW, the "Hobby-Loss Rules" state that if an activity, either a business or investment, generates a profit in 3 out of 5 consecutive years the IRS must assume that you are engaged in the activity with the intent to make a profit. The IRS can however, question the validity of the specific expenses you are claiming.

If a person did not make a profit in 3 out of the last 5 years the IRS will not automatically assume that the taxpayer is not engaged in the activity with the intention of making a profit. In the absence of proof, the burden is on the taxpayer to prove by a showing of the facts for their particular circumstances that he/she intends to make a profit and have a reasonable expectation of eventually being able to do so.

Hope this helps.

fishonnelsons · 03-15-2008, 07:47 AM

Thanks Roger, that clarifies it even for me. My guy mutterred something like "pigs get slaughtered" when we were talking about it, and he made his point.