Planes, Trains, Boats and Automobiles

Business owners like tax deductions. They especially like the idea that maybe the cost of the new boat that caught their eye at the boat show could be a tax deduction for their business.

After all, they would be using it for business, entertaining referral sources and potential new clients, so it should be a legitimate business deduction, right? But before opening up the corporate checkbook, you need to know the special rules surrounding ownership and operation of boats, planes and automobiles to avoid an unpleasant surprise when it is time to file your taxes.

Boats
We are surrounded by beautiful water in Southwest Florida, and boats can provide a way to entertain potential customers. To deduct the cost of a boat, you must have a trade of business that requires the use of that boat, such as a charter boat or fishing business. If you use your boat for entertainment purposes, it falls under the entertainment facility rules, and no ownership costs are deductible.