Charter captains will be getting crushed

[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.....

[Hooper]

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]

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.

[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?

[MakoMike]

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.

[beamie]

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]

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

[MakoMike]

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]

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.

[Roger]

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]

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.