| Bay Yacht Agency |
Tax Guidelines
2008 | |
|
|
Congress Passes Stimulus Package 2008
Here's how it might affect you if you want to take advantage
of it to get a new boat... But first, join Douglass and I in
offering a toast to congress and the president for helping small
business in a significant way...
President Bush signs new bill into
law 2/13/08...
 Here's
the relative information in brief:
-
Increases the Code Sec. 179 $128,000 expensing limit to
$250,000 and boosts the overall investment limit from
$510,000 to $800,000, for tax years beginning in 2008.
-
Permits a bonus first-year depreciation deduction of 50%
of the adjusted basis of qualified property acquired and
placed in service after Dec. 31, 2007, and before Jan.
1, 2009. The otherwise applicable "luxury auto" cap on
first year depreciation increases by $8,000 for vehicles
that qualify.
For the summary of the joint committee,
go here.
SEE THE
ACTUAL TERMS HERE--SUMMARIZED BY JOINT COMMITTEE
How do you get the tax advantages?
Typically, you set up a LLC or other pass through
entity and the tax advantages directly offset taxable income
from any source, including your regular job. With our
business plan, you will know pretty precisely what the tax
advantages will be, so you can adjust your with holding and
use the tax advantages to offset cash flow immediately! You
do not wait until the end of the year (even IRS will tell
you this!)
So, what does all of this mean for those wanting to set
their boat up as a business in our Boat-As-A-Business
program?
If you would like more general information on our Boat-As-A-Business
Plan, and haven't seen the basics yet
Go here.

First of all, perhaps nothing!
Uncle Sam has always supported small business. He literally
wants you to have a boat! In fact, if you're probably
already paying for a boat--you just don't have it. You're
paying taxes to the IRS that could be building equity in a
new boat! The tax rules as they exist now, are incredibly
helpful.
Take
a look...
The way the tax rules were written and in effect prior to
1/1/08, if you followed our guidelines and set your boat up
as a business you could:
1. qualify for MACRS (10 year double declining
depreciation), and...
2. expense up to $128,000 of your boat investment the first
year
3. Write off all or a significant share of your expenses.
These tax deductions, combined with the potential income
available, could cover 80-100% of your boats cost with under
50 days of charter. With available
financing and available rebates, your downpayment could be
0-10%, and your cash flow $0!
How might these new tax laws
help you?
If,
for any reason, you need a huge tax deduction that can
offset income from other sources... For example:
1. You are at the top end of the tax table.
2. You have, or are anticipating a big increase in income this year.
3. You have a huge capital gain from real estate, stock
options, or whatever--these deductions can offset that tax
liability.
Imagine, you can write off up to $250,000 as an expense
allowance--as long as the boat costs more than that. And/or,
you can depreciate 50% of the boat this year. What could
this mean just this year?
You purchase a $500,000 boat (and have a marginal tax
bracket that would justify a large write off--25% or
greater-combined federal/State): 
You could get the $250,000 179 deduction
You could get bonus depreciation on the resulting basis or
another $125,000
You then get the first years depreciation (based on the half
year convention, MACRS) 10% of the basis from above--another
$12,500.
In other words, a total
deduction this year of $387,500-- THIS
YEAR!
But, as I said, you can take any portion you need
of all of this. We can show you exactly how it would work,
based on your situation. Want to know more?
Putting it together...
When you set your boat up as a business you get income and
tax advantages. How much in tax advantages?
From a tax point of view, there are two aspects. Advantages
the first year (when you put your boat into
service) and the longer term benefits. The first year you
can qualify for the 179 expense allowance of up to $250,000
and depreciate 50% of your boat. See example above.
The new tax stimulus program offers tremendous benefits and
tremendous flexibility.
The first step is to calculate or find your "marginal tax
rate". Once you do that, you can figure out what your marginal rate will be for the
tax benefits to follow, and thus what your tax savings will
be.
Tax Calculator
Figure your tax bracket!
Click here. Find your marginal rate now, and then apply
as much of the tax advantage as you like to watch your
marginal rate reduce and the effect on reducing your tax
liability. For example, say you have $400,000 in income with
$100,000 in deductions currently--make the calculation, and
then increase your deductions $100,000, $200,000 or more.
You can print your results and they will look something like
this:
Now
you can qualify for writing off 50% of your boat, plus
qualify for the 179 expense allowance of up to $250,000. Use
as much as you need, and then use the rest of the tax
advantages over subsequent years.Get the complete information here.
If you want a more detailed business plan and a
complete explanation of the tax advantages and how to
qualify for them--this includes information that your tax
advisor may need to better understand how this program might
work for you.
Our Tax Planning Guide
will include:
1. How to qualify for active tax advantages.
2. What's different with this approach and a charter company
plan.
3. The two keys to qualifying--this will make your tax
advisor say, Ahhh...
4. The information your tax advisor needs to understand
whether this program might work for you.
5.How to avoid an audit.
6. Record keeping requirements.
7. The IRS tests.
Bonus links will:
A. Explain in detail how the plan works.
B. How your business will operate
C. How the management company interfaces with you.
To get access to our
confidential information and a custom business plan-please,
please go to our web page, fill out our finance application
and
fill out our form.
You will receive a detailed business
plan with month by month, and year by year tax advantages,
cash flows and more. Find out exactly what the benefits are
to you.
NOTE: If you do not wish to fill out the finance application
yet, we'll still provide a comprehensive, summary business
plan that should help you determine if you want to go
further.
If you have any questions, please call.
For details
410-263-2311
info@bayacht.com
Hours: Mon-Fri. 9:00-5:00 Sat: 10:00-4:00 Sunday by
appt. Closed Thanksgiving Thursday-Sunday, except by appt.
Boats available in
our program: Jeanneau Monohulls 36-54', Fountaine Pajot
Catamarans--Sail 36-65', Power 35-55', Selene
Trawlers, Jeanneau Power Boats 32-50' and Floating
Homes 42-58'.
See
them all here.

See our newsletter for the latest news,
here.

|
Ask your tax advisor for help now?

Maybe,
maybe not.
Ultimately, it is wise to talk to your tax advisor to
optimize your situation.
However, the decision itself, in the end, is yours. Your tax
advisor is busy and may not fully understand this program.
Right now, (s)he probably doesn't have time to figure it
out.
We've found that about 50% of tax advisors will say no to
the idea without fully understanding why this approach
works. (The other 50% enthusiastically endorse the idea--if
you can't find the right advisor, we can refer you to one.) Keep in mind, we've already helped over 650 people
set their boat up as a business--successfully.
Far from
encouraging an audit, when you follow our guidelines, you
are very unlikely to be audited--however, if you are, as 3
others have been, you will have the tools and knowledge to
get through it simply and easily. Not one of the people who
followed our guidelines lost a single dollar of tax
deduction claimed!
The disadvantages of delaying a decision...
Timing is everything!
If you can get a boat for spring, that's ideal (ask us
what's available). You can qualify for a full years of tax
advantages and get income to cover cash flow the year you
place the boat in service.
There are other scenarios that work, including getting a
boat in the fall and having it go directly to the Islands.
Talk to us to better understand how to optimize your
situation. But, if your tax advisor isn't ready to talk
right now--don't delay. Keep moving forward and let him
catch up later. The most important thing is that you get and
understand the information that we can provide. 410-263-2311
Get the information that you need...
If you would like more general information on our Boat-As-A-Business
Plan, and haven't seen the basics yet
Go here.

If you want a summary business plan --please
fill out this form here.
To get access to our
confidential information and a custom business plan-please,
please go to our web page, fill out our finance application
and
fill out our form.
|
|
| About Bay Yacht Agency
In Annapolis since 1972, still owned and operated by the
founder, Eric Smith. We're located on the harbor, in the U.S.
cruising capital, Annapolis. We have helped 1,000's of owners
customize their boat to meet their specific requirements. We
offer full yard and commissioning services, Sailing courses
and charters, financing, insurance and complete services in
every category.
Visit our capable and knowledgeable professionals at our
office On the Harbor, 2nd and Spa Creek (next to the Chart
House Restaurant, in the Yacht Haven Marina.) Email: info@bayacht.com Phone 410-263-2311.
HOURS: Mon-Fri.: 9:00 to 5:00 Sat.: 10:00-4:00 Other
times by appointment.
To meet us any time, including outside of the hours
shown, please give us a call at our office anytime:
410-263-2311

| |
|
|
| |