Boat-As-A-Business

INDEX:

Special fact filled seminar.  Schedule and sign up! Details here.

Tax Calculator here--What bracket am I in, anyway-- this will take you off of our site so just close the page when you're done and come back here

1.     Why do it?

2.     How can you accomplish all of this?

3.     Am I qualified?

4.     How it works

5.     Misconceptions of experienced sailors and tax advisors

6.     How to get the real facts Request more information and a sample business plan.

7.  Q&A Page Here.

Go to our Q&A page here and find out why everything is not always as it first appears. Link here.

See sample business plans here. Click here

Ready to act now? Call 410-263-2311 or Click here to get a complete business plan and more details. BONUS, instant access: "Why you should have your own home based business"  (Whether you get a boat or not!)

Contact BYA live...

1-800-YACHT20 410-263-2311 Justice, Learnard Hand said:  "There is nothing sinister in arranging one's affairs as to keep taxes as low as possible...for nobody owes any public duty to pay more than the law demands." Let's Go Cruising is our affiliate who manages your boat... Click on the image to the left to see a short video. Cash Flow A simplified look at Cash Flow... Expenses Return This is a simplified look at the costs and return with our Boat-As-A-Business program. What others have said... "Let's Go Cruising has been managing my 36' Jeanneau, Lady Jane, for the past six years. During this time, they have been consistently courteous, helpful, ready and willing to do anything to make the yacht management experience pleasurable. Every time that I wanted to sail Lady Jane, she was always ready to sail, very clean, and well maintained.  As far as I'm concerned this is the only way to really enjoy owning a yacht.  I am extremely grateful for the service that the folks at Let's Go Cruising have provided me over the years and I highly recommend them to everyone." Sincerely, Bill Dornsife, Owner Lady Jane Hi Chris, I arranged a teleconference with TH (BYA's recommended CPA) at my CPA's office.  My CPA had several questions, since he was unfamiliar with the "Boat As A Business" set-up.  Terry was direct, easy to understand and polite.  Speaking with him was of great benefit and definitely a smart suggestion on your part.  My CPA and I, both, feel confident in my business plan. SB, Mossouri Testimonials The Funks are just one example of a couple that used our Boat-As-A-Business plan to gain experience and equity for 5 years, and then go cruising... The Funks continue their adventurous cruise on their Fountaine Pajot. Keith Cressman bought a Jeanneau 43DS from us at the end of 04. He recently attended our owner’s reception in Annapolis (on April 9th.). I asked him what his tax advisor said about our program: “You can qualify for active tax advantages… .This is the best idea that I’ve ever seen!” When this plan is set up right it offers substantial tax advantages. We have the knowledge to show you, and your accountant how to set up a program that works! Let's fix this now. You are probably already paying for a new boat--you just don't have it. You're paying for it with taxes that could be applied, instead to build equity in a new boat.

For Power or Sail. Monohull or Catamaran...

Setting your boat up a business? This is a unique idea--one that several tax advisers have commented on: "Innovative.", "This is the first time I have seen one of these programs set up so it will actually work.", "This is the best idea I've seen". "...(a) home based business is one of the few legal tax shelters left." (Sandy Bodkin-tax advisor) Find out how to incorporate this important approach into your boat owning plans. Your retirement plan. You can own a boat in 1/3 the time for 1/3 the cost--while you enjoy it as much as you want!

2. Psst... Want to know a secret?
Psst... Want to know a secret?

Get the boat that you want, faster--when you use the Secret. You probably used the secret when you chose your life partner, when you made the most money you ever did, and when you recovered from an illness. You'll need all of it's powerful advantages when you decide to join the boating lifestyle.

The secret is why 1% of Americans hold 96% of America's wealth.


Insider information: Find out just what the new, 2008 tax advantages actually are. Click here.

Getting what you deserve!

Don't let this happen to you! Don't keep getting the old shake down with nothing to show for your hard earned, tax dollars. You're probably already paying for a new boat, you just don't have it--but with the Tax Relief Act of 2003, Uncle Sam actually wants to subsidize the costs of ownership for a new boat...

If you're ready to spend about 10 minutes of your time to learn about this important option, scroll down--otherwise, bookmark this page and come back when you have the time.

Why do it?

What if you could own a boat with no out of pocket costs at all? Own a new boat outright in 5 years for 1/3 the cost that a conventional purchaser would pay (Own in 1/3 the time for 1/3 the cost)? What if you could enjoy the benefits of new boat ownership with total control (just like a private owner), use your boat as much as you like whenever you like, not just any boat, or a charter boat, but exactly the kind of boat that totally suits your needs—for less than the cost of settling for: a brokerage boat, fractional ownership, time sharing or even chartering?

Would you be interested in knowing more?  Go to the tax calculator here. (This will take you off of our page, so simply shut down the calculator to come back.)

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How can you accomplish all of this?

By simply setting your boat up as a business. When you find out how ridiculously simple this concept is, you’ll wonder why everyone doesn’t do this!

In fact, there are lots of advantages to having your own business. If you don’t already have your own business you should. If you do, you already know the advantages. There are tax benefits galore if you set up a business. Everything from special retirement account provisions, to employing your family members. (I’ll provide a link later for more details.)

Setting your boat up as a business is particularly attractive because of the generous depreciation allowances and the benefits assigned by the Tax Relief Act of 2003—these expire soon, but you can still qualify. More on all of this later.

So, why doesn’t everyone do this? For the same reason that everyone doesn’t jump on a stock that’s going to sky rocket—at the beginning? They just don’t have the inside information, a guru, an advisor, who can explain the ins and outs of this particular strategy and point them in the right direction. Now you do! Just like the almost 600 others that I have helped before you. This is not a new or unique idea, but it is a unique application of a number of successful strategies that most people, including most tax advisors just haven’t taken the time to figure out. Too bad for them. Great for you—you are about to become a member of a very exclusive club consisting of those who truly understand the advantages of setting their boat up as a business.

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Am I qualified for membership in this exclusive club?

Like with all great things you find out about, you don’t get something for nothing! The ideal candidate should be a successful individual, who wants a boat regardless of its profit or tax advantage potential. (S)he should be able to qualify for financing whether the boat is purchased for private pleasure or set up as a business.

(S)he should simply wish to explore this alternative means of ownership in order to:

• Preserve capital for other investments.
• Own a boat outright for the least possible costs at some pre-planned, future time—perhaps as a part of retirement planning.
• Convert taxes normally paid, into boat equity.
• Own your boat in 1/3 the time for 1/3 the cost--For instance, own in 5 years for the same out of pocket cost as a conventional purchaser would pay for 15.
• Eliminate or reduce the monthly cost of ownership while you...
• Have the unrestricted use of the boat as much as you want, while someone else professionally manages the care and maintenance, someone else cleans it and always has it ready for you.

Doesn’t this sound like the ideal partner? This guy offers to do all the work, while you get all of the equity, enjoyment and tax advantages. We’re offering to be that partner! All of the costs, including those of this professional management are covered by the income and tax advantages you earn when you’re not using the boat. (Assumes you’re willing to give up 5-9 weeks a year in order to earn income and qualify for tax advantages—more on all of this later.)

Our owners recently took a survey to help us understand their motivations. You can see it, and, in effect, take a test to see if your needs and concerns match theirs—or not… Can you pass this test? http://www.bayacht.com/aaa/nl-artic/DecisionMaker.xls

(NOTE: If you can’t download this Microsoft Excel document, see the results in a pdf document at:

http://www.bayacht.com/aaa/nl-artic/DecisionMaker.pdf

You don’t need any previous business experience, or need to have owned a business—though if you have or do, you probably already understand the advantages of owning your own business and will understand many of the tax issues without further explanation.

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The Road You're On

People who don't own a business only imagine the rewards. They don't know the risks. They don't know that owning a business means you have to talk to people who are knowledgeable about the specific opportunity that you are considering. Who understand that the best outcome is obtained by setting your business up so that it doesn't attract undue scrutiny--from the beginning.  There are not always people you can talk to. It's hard to find advisors you really trust. We have helped over 600 people set their boat up as a business. People like Joanne, above, and Joe to the left. (Click on Joe's picture to see the after picture!) Living ordinary lives, they have been transformed by this exciting and fun new business. We have discussed the pros and cons with 100's of tax advisors. Seen, in the real world, what works and what doesn't. To the best of our knowledge, in the past 15 years, we have only had one client audited--and he simply didn't follow the guidelines that we suggested. (Even at that, he passed the audit with flying colors and not one single dollar deducted!) Go to our Q&A page here and find out why everything is not always as it first appears. Link here. Copy of a letter to a client concerning his disappointment with marine banks, and uncooperative tax advisors. More information here. What happens when you start a business wrapped around your boat? You get tax advantages--generally you can write off all of your expenses, and depreciate up to about 65% of your boat in the first 5 years. This is an accountants dream! (S)he can use these advantages flexibly to adjust your taxes dramatically down! (If you don't have a savvy tax advisor--we can provide one!) There are other advantages to owning a business as I mentioned—employing family members, setting up retirement accounts, etc. Advantages not generally available to those conventionally employed. For more, see: Link to general business tax advantages: http://www.bayacht.com/aaa/nl-artic/ArticleWhyaBusiness.htm

How it works

It’s really simple. Let’s imagine that instead of a boat business you decide to set up a Shoe Store business.

As we go along, I’ll make the boat analogy where appropriate, but basically everything works the same way in any business, including the boat business.

1. First you decide on the format: Sole proprietorship, partnership, LLC, Sub S corporation or “C” Corporation. Generally most people elect the LLC or Sub S format. Both of these allow tax advantages to flow through to your individual tax returns, and offer the same liability protection as the “C” Corporation. (This discussion is meant to be brief so I won’t go into all of the nuances of the different formats—however we can provide you more specific advice when the time comes.)

2. Now that you’ve set up your LLC, (we can do this for you in about 15 minutes—and even have “shelf corporations” all ready to go!) you set up a business checking account to run all of your transactions through.

3. The tax issues. (Back to our Shoe store example.) Let’s say that you lease store space, but purchase fixtures and a delivery van for a total of $150,000. You take a loan out for this amount. So what are the tax consequences so far?

Thanks to the Tax Relief Act of 2003, in effect for a limited time, still—you get an arbitrary gift from IRS—you can take from $0 to $108,000 as a 179 expense allowance in the year (this year) you acquire the business assets. (In the case of the boat, up to $108,000 as long as the boat costs more than this—there are some other guidelines, but let’s keep this simple) Now, you don’t need to fully understand this, it’s just based on a formula established by IRS for all businesses—including your boat business.

The rest you depreciate over the designated period. $42,000 over, let’s say 10 years. You use the MACRS (arbitrarily established by category by IRS) method so you get 10% of that, $4,200 as a tax deduction the first year, then 18%, 14.4%, 11.52% and 9.98% respectively for the next 4 years and so on. Something over 65% for the first 5 years or, depending on the price up to 70 or even 80% when you include the 179 expense allowance!

Now, because you are operating as a “pass through” LLC, these deductions are all applied against your ordinary income from all sources, including your income from your normal business, and the income from your new “shoe store business”. As you might imagine, because of the generous 179 and depreciation deductions--your tax deductions will, no doubt, exceed your shoe store income. That’s o.k.

You next apply these deductions against your ordinary income from all other sources to continue to reduce your overall, personal tax liability.

But that’s not all. Remember the loan? You get to write off the interest. The rent? (Dockage) Yep. Insurance? Yep. Maintenance? Of course. Salaries? (Management fees paid to LGC) Yes. Your travel to the “Shoe Store convention” (Trips on your boat to introduce friends and associates to cruising (demos)). Absolutely.

In fact we’ll show you why, in our unique program, virtually all use of your boat will be business use and deductible. Most of our owner’s get as much or more use of their boat as compared to a conventional purchaser—however they also get income when they’re not using it, and tax advantages that offset virtually all of their costs.

So, as not to carry this too far, you don’t wait until the end of the year to get these tax advantages. Our business plan will give you a close approximation of the tax advantages that you can expect—year by year, including the loan interest, depreciation and all of the other deductions. Knowing this you simply amend your W4, or otherwise adjust your with holding to reflect your new status. So this immediate increase in income can be used to cover your normal “out-of-pocket expenses” (Loan payment, dockage, insurance, maintenance, management fees, etc.)

In fact, most of our owners find that with as few as 5-7 weeks of charter (out of a 28 week season on the East Coast) along with the tax advantages, they own their boat with virtually no out of pocket costs, compared to a conventional purchaser that may be paying 10-20% of the purchase price annually for these same expenses (Loan payment, dockage, insurance, maintenance, etc.).

Want to make your boat a part of your retirement plan? We’ll show you how to use your savings and tax advantages to own your boat outright in 4-6 years, instead of waiting the normal 15-20 that it takes a conventional purchaser. You can truly own in 1/3 the time for 1/3 the cost and I’ll share with you exactly how to do this when you tell me your goals.

4. What makes our plan unique, and allows you to qualify for the full business tax advantages mentioned is:
   1. This plan is based on setting your boat up as a business, not on becoming a part of a “Charter Company Program”. In a typical charter company program you simply would not qualify for most of these tax advantages.
   2. We make you a “Sales Associate”—an independent contractor, contracted with BYA and LGC. I’ll show you how this simple idea will translate into giving you unlimited use of your boat, without reducing your tax advantages.

All of this and more will be explained more fully when you fill out our on-line form, linked below, and in complete detail with a fully customized business plan when you fill out the form requesting the custom business plan, also linked below.

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Misconceptions

By experienced sailors

Charter boats are poor choices for serious cruisers after they finish their charter life. Their layout is broken up with as many cabins and heads as can be crammed in and their performance and load carrying ability is poor. True. Therefore they suffer at resale, often taking a 50-60% loss of value. True. By the end of their charter life, they are in terrible condition and so either need extensive refurbishment, or are sold at a tremendous loss. True.

But, this is not what we’re talking about. In our Boat-As-A-Business plan, you choose the kind of boat you want to end up with (if you decide to sell it, it’s a normal boat like a private owner would buy and it has been meticulously maintained so it doesn’t suffer at resale, and is always ready to go—with no refurbishment required—whenever you want to leave the program.) Our boats are in the 5 star category and you will be proud to own one. Because of our regular maintenance and preventative maintenance program, without lifting a finger (and having more time to enjoy your boat) your boat will generally be in better condition than most privately owned boats where a typical owner’s maintenance schedule is totally hit or miss compared to our professionally managed program.

Much more information on all of this is available when you fill out the form below.

(Misconceptions) By Tax advisors

Accountant, tax advisor, tax attorney, Good old Joe, or whoever—these guys come in a variety of flavors from bean counter to creative consultant. The guy that does your taxes, may or may not be the right advisor for you. Your job is to not get discouraged if you hear quick, off the cuff answers to your questions—without a review of the total program that we offer.

Over the years, we have had knowledgeable tax advisors refer clients to us, and we have had lazy advisors who just don’t get it and don’t want to take the time to find out more. One client asked me a question after getting a negative opinion from his accountant. I spent all of 60 seconds on the internet. Google turned up many pages on the subject, most of the resulting sites had the answer right in the Google summary—I didn’t even need to open the link to find out the right answer!

Our CPA advisor, recites that many CPA’s don’t fully understand depreciation. Most operate in a narrow world and have a narrow knowledge base. The bad news is that approximately 50% of our owners tax advisors first told them not to proceed. The good news is that the other 50% educated themselves and became supporters (and many of those told not to proceed, found a better advisor and are now enjoying their new boat!).

In the end, it may be more up to you than your tax advisor to decide whether this program is for you or not. One thing I promise is that if you will fill out our form and get the information you will be 90% of the way to understanding whether this makes sense for you—and you should do this before talking to your advisor.

What if you and your friend had a $1,000 bet on the color of the next car coming down the highway. You are standing along side this highway at night and a car is approaching with blinding headlights.  Your friend declares that the car is black while you are both still standing in the glare of the headlights. You, prudently, wait until the car gets alongside you out of the headlight glare and you clearly see that the car is Blue. No one said that a part of the bet was that you couldn’t wait to get more and better information! It’s your money. Take the time to get the information you need to make an informed decision and you’re sure to be a winner!

After all, if you don’t understand the program and are not an advocate, how can you expect to convey your desire and enthusiasm to your advisor? Remember, the easiest thing for him is to simply say no. No possibility of a problem later—for him. But if he’s good. If he understands the difference between a charter company program and a management program. If he understands that you really want to do this. If he understands the unique differences in our program that help you to meet the 7 tests for meeting the active vs passive business criteria; how our program insures that you don’t fall into the “hobby loss” elimination arena—If he takes the time to understand, he will be able to move on to help you optimize this business opportunity for your situation. If he can’t get to this point, we can refer you to someone who is already there.

In either case, you need to get more information before you go to a tax advisor. You need to understand the concept yourself. We’re good at helping with that, and with making the process simple and fun. After all, we’ve helped almost 600 others navigate through these waters before.

Now, if you would like to get a sample business plan that shows how to reduce or eliminate the costs of ownership. How the cash flow works with and without tax advantages, and more--please fill out the form below.

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Where You've Been is Important, but you can't do much about it — Where You're Going is totally up to you!

Go to our Q&A page here and find out why everything is not always as it first appears. Link here.

Getting good tax information is critical. Among the simple tax tips that we will offer after you fill out our form is "How to avoid being audited in the first place!" For example, your LLC name is critical. We'll explain why.

NOW: Pay no sales tax. Pay no duty. Want to find out how/why? Call  410-263-2311 (Just one idea of immediate savings available with some creative knowledge!)

So, how to you figure your tax bracket in order to determine your savings?

Note, there are two answers. What is your average tax bracket, and what is your marginal tax bracket, and, what's the difference.

Average tax bracket--what you pay on your income. So if you knew that you were going to have 200,000 in income next year, we could compute your average tax.

Your marginal tax bracket is what you pay on the next dollar earned--in the case of our program, it's what you would pay on your new boat business income, and so now this is the new basis of your tax savings.

In addition, don't forget to add state tax. So if you had 33.9% Fed tax and state tax of 4.75% (MD) your marginal tax bracket would be 38.7%! Now you begin to see the extent of the potential savings.

Tax Calculator here--or click on the graphic this will take you off of our site so just close the page when you're done and come back here.

How to get the detailed information...

Join us for a seminar. Schedule and more information, including a sign up form...

At this point, neither of us knows if this program is right for you. But, if you would like a free consultation so that we can exchange information in order to create a business plan specifically for you, Please fill out this form...

If you would like to call:

1-800-YACHT20

Or 410-263-2311

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Boats available for our program. Jeanneau (Power & Sail), Fountaine Pajot (Catamarans, Power & Sail), Selene Trawlers

Contact us here!  

 Bay Yacht Agency, "On the harbor, Annapolis"  Since 1972

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Call, Sales/Management  1-800-YACHT20 (922-4820) or 410-263-2311

Charter (Let's Go Cruising--offering America's 5starfleet.com): 1-888- 995-BOAT or 410-263-1818

Bay Yacht Agency Group Power/Sail/New/Used/Charters On the Harbor in Annapolis 326 First Street, Suite 29 Annapolis, MD 21403 (map) Sail/Cat Trawlers: (410) 263-2311 Power 410-263-2312  or Cat Trawlers . (410) 263-2964 (fax) info@bayacht.com Charter from our 5 Star Fleet Let's Go Cruising 410-263-1818 info@letsgocruising.com

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