I hope the bill includes this also:
The tax deduction methods:
BARE-BOAT CHARTER (bare meaning without a crew): More than 600 big-boat owners in this state annually deduct all their expenses — from moorage costs to the purchase price of on-board plasma-screen televisions — because they let others use their boats for a price. Thousands of other big-boat owners do so nationwide. Most hire management companies to charter their boats, and nearly all chronically lose money, at least on paper. But as one Kirkland couple found out, those who have declared losses at tax time may be out of bounds.
ACCELERATED DEPRECIATION: A local businessman expects to save $3 million on his taxes next year by depreciating half the purchase price of a 130-foot yacht under a provision of the Bush administration’s tax-relief laws. A yacht dealer in Annapolis, Md., said 10 of his customers are doing the same. The measure expires at the end of the year.
CORPORATE YACHTS: The region’s largest real-estate company and a small electrical contractor in Poulsbo both have a showy asset — a corporate yacht — and both write off the expenses at tax time. Other companies that own yachts, including Paccar, wouldn’t discuss whether they claim deductions related to their boats. Some companies say a yacht isn’t a business expense, while others defend the deductions.
SECOND HOME: A small sleeping platform, a propane camp stove, a port-a-potty and a tiny sink with a water supply are all you need to qualify your boat as a second home. The law says you have to stay on the boat 14 days a year, but boat owners say nobody checks. A Tacoma yacht owner says the second-home deduction helped lower his tax bracket, while boat manufacturers say they install the necessary amenities on small boats with cuddy cabins so buyers can qualify for the tax break.
Each of these tax breaks is examined in detail in this series. Today, separate articles cover the depreciation and corporate-yacht deductions. Tomorrow’s coverage will include stories on the second-home and bare-boat charter deductions.
IRS officials said they don’t keep track of how much money the government could collect if these deductions were eliminated. Conservatively, the annual total could approach $1 billion.
