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-   -   Trading boat 4 boat of equal value ARE TAXES DUE ? (http://www.trawlerforum.com/forums/s62/trading-boat-4-boat-equal-value-taxes-due-43502.html)

JOY-SEA 03-12-2019 09:41 AM

Trading boat 4 boat of equal value ARE TAXES DUE ?
 
Other day I was a boat dock , talking with a fellow boater ,
He was saying , I use my boat so seldom , Just sits in wet slip , paying costly marina fees , Don't want too get out of boating , a trailer boat something I can take home , keep free , maintain at my leisure
Nice looking Luhrs sport fisherman around 34 ft ,
Value around 60 thousand . diesel

I own a 2004 Regal Commodore , 30 ft , 9.6 beam , gas . Value $ 45
Luxury galore, comforts of home
Has twin IO kept high & dry , Bottom like new , IO's clean
I have a 3 axle trailer , Trailered many times ,
Retired using Regal multiple days weekly ,
Having a trailer I am mobile

Guy says too me , INTERESTED IN A TRADE ?
His boat on the surface very nice, large areas, diesel engines . A brief moment I considered but my next boat will be a Trawler something I can spend weeks aboard cruising.
GOT ME THINKING - what's the advantages, disadvantages, taxes ?
Hitting Google lot of info on taxes but little on barter / boat 4 boat
Many adds land for boat
Boater wanting too down size willing too trade ,
Collector car for boat , plane , motor cycles
How is this handled ? up side down , adding cash ,
Bartering saves broker fees , is it possible too trade titles with no taxes

Any fellow trawler owners looking too trade a luxury Regal with new engines , trailer , for a equal VG mechanical condition trawler ????

Location is FL

thanks as usual

Seevee 03-12-2019 09:47 AM

Quote:

Originally Posted by JOY-SEA (Post 747989)
Other day I was a boat dock , talking with a fellow boater ,
He was saying , I use my boat so seldom , Just sits in wet slip , paying costly marina fees , Don't want too get out of boating , a trailer boat something I can take home , keep free , maintain at my leisure
Nice looking Luhrs sport fisherman around 34 ft ,
Value around 60 thousand . diesel

I own a 2004 Regal Commodore , 30 ft , 9.6 beam , gas . Value $ 45
Luxury galore, comforts of home
Has twin IO kept high & dry , Bottom like new , IO's clean
I have a 3 axle trailer , Trailered many times ,
Retired using Regal multiple days weekly ,
Having a trailer I am mobile

Guy says too me , INTERESTED IN A TRADE ?
His boat on the surface very nice, large areas, diesel engines . A brief moment I considered but my next boat will be a Trawler something I can spend weeks aboard cruising.
GOT ME THINKING - what's the advantages, disadvantages, taxes ?
Hitting Google lot of info on taxes but little on barter / boat 4 boat
Many adds land for boat
Boater wanting too down size willing too trade ,
Collector car for boat , plane , motor cycles
How is this handled ? up side down , adding cash ,
Bartering saves broker fees , is it possible too trade titles with no taxes

Any fellow trawler owners looking too trade a luxury Regal with new engines , trailer , for a equal VG mechanical condition trawler ????

Location is FL

thanks as usual

Florida would trigger no tax if no money changes hands. I'm sure some of the brokers can chime in and offer good advise.

Trading sounds like a viable way to accomplish your goals.

ssobol 03-13-2019 12:13 AM

Some states will charge you based on the assessed or book value of property when you go and register it if you don't have a proper bill of sale. Got around the problem of people buying cars for $1 (and getting taxed on that) and then buying the owner's manual for say, $3000. I would kind of expect that both parties would have to pay tax on each boat when they went to register them.

But maybe FL is different.

Bkay 03-13-2019 07:32 AM

This may turn into a tax avoidance/evasion debate...but here goes...

I recommend you call your state's department of taxation and ask questions. As I recall from Virginia, you have sold something when you exchange anything of value - that can be labor, a boat, cash, etc.

If you are changing boats, you will want to document it in writing so the PO doesn't come take your boat back. That written document can trip you up. If you sell an owners manual for $xx,000 dollars and a boat for $1 - that certainly sounds like a tax evasion situation. Particularly if the boat is common enough to be in one of the value guides the tax dudes use to assess value.

Your state may view it differently so I wouldn't trust advice from the internet (especially not my advice).

Mikala 03-13-2019 08:02 AM

Trading boat 4 boat of equal value ARE TAXES DUE ?
 
Quote:

Originally Posted by Seevee (Post 747992)
Florida would trigger no tax if no money changes hands. I'm sure some of the brokers can chime in and offer good advise.



Trading sounds like a viable way to accomplish your goals.



This is bad advice.

Can you back this statement up? I live in FL and do not believe you can walk into a tax office and register a boat where no money changed hands.

Further, tax would be due. Avoidance in this instance would be fraudulent imho because you are knowingly purchasing the boat based on the cash value of your trade.

twistedtree 03-13-2019 08:11 AM

I think tax would be due based on the value of the transaction. Just because you paid with a boat rather than cash doesn't change the value of the transaction. There are often exemptions for legitimate gifts, like between family members, but this doesn't qualify as a gift since you paid for it with the title to your boat...

twistedtree 03-13-2019 08:17 AM

That said, it occurs to me that when you buy from a dealer and trade in another boat as part of the deal, you only pay taxes on the difference in value. I can't say for certain that's universally true, but I think it's widely so. So if you buy a boat from a dealer for $40k, and trade in a boat for $30k, you pay taxes on the $10k difference.


So, if you conducted the swap through a dealer, I think it could be legitimately accomplished since each of you will be buying a boat while trading one in of equal value. But the dealer will want some compensation for the transaction, and brokers typically want 10% which is probably double what your sales/use tax would be. So may not make sense.

Mikala 03-13-2019 08:22 AM

Trading boat 4 boat of equal value ARE TAXES DUE ?
 
Not sure about boats (and I cannot imagine it would be different), but when you purchase a car with trade-in you pay tax on the purchase price of the car before the trade is considered. The value of the trade-in is treated as currency toward the purchase.


Now, consider you trade your house for your neighbors house. Good luck convincing your local property appraiser/tax assessor that the value of the transaction was $0.

mystery 03-13-2019 03:27 PM

a lot of bad advice in this thread

read your states regs

some have a very specific process to follow and form must be filled out. to my knowledge most states say that trades have to be done through a dealer in order to take advantage of the trade-in exemption. some dealers are willing to handle the paperwork for a nominal fee. see if yachtcloser has a service or any advice.

if you need help finding or interpreting your state's regs, call the proper department or better yet email for their "opinion".

Action 03-13-2019 04:37 PM

Quote:

Originally Posted by Mikala (Post 748238)
Not sure about boats (and I cannot imagine it would be different), but when you purchase a car with trade-in you pay tax on the purchase price of the car before the trade is considered. The value of the trade-in is treated as currency toward the purchase.


Now, consider you trade your house for your neighbors house. Good luck convincing your local property appraiser/tax assessor that the value of the transaction was $0.

As a reformed worker in the retail automotive field, what was described above was true for me in Washington State, Michigan and Arizona. Sales tax is calculated on the vehicle purchase price. Trade in value (of anything) is deducted from the transaction AFTER sales tax is calculated from the purchase price.

As a current worker in the Real Estate industry (in Arizona) there is no sales tax for Real Estate. (in AZ) All taxes collected on Real Estate are done so on a yearly basis called property taxes. I am pretty sure all states in the US have property taxes. Some may have some type of limited sales tax on Real Estate as well. So some one can be gifted or given Real Estate with no tax owed for the transaction. However the on going ownership of Real Estate taxes are owed.

mystery 03-13-2019 04:42 PM

Let me give you an example. Someone gives you a boat for free that is not directly related by blood. The boat is worth $50,000 per blue book. Even though you paid $0, most states will assess sales or use tax on it based on it's bluebook value unless you can show it's worth less (i.e. bad condition) during the initial registration. Same goes for autos.

Action 03-13-2019 05:07 PM

Each state is different -

In Arizona for a private party automotive sale (related parties or not) there is no sales tax due. This only applies to private party vehicle transactions in the state of AZ. A vehicle purchased at a licensed vehicle store (new or used car dealership) has to pay sales tax! (Yeah the car dealers don't like that either)

Ongoing taxes (a use tax if you will) for cars and light trucks are charged each year (or for 2 to 5 year for extended renewals) to renew the AZ registration. This tax is included in the registration process and is an excise tax based on the value of the automobile. Bringing in a privately owned vehicle from out of state does NOT trigger a sales tax whether the sale occurred that day or years earlier from some other state. It was a private sale. (Personally I bought a truck in Florida in 2016 at a used car store, drove it to AZ and paid no sales tax in either state.)

In AZ For vessels (boats of any type) the yearly registration fee is a flat fee based on length. Zero to 64 feet + the registration fees are $20 to $66 for the different lengths. There is no tax owed or charged. I think there is no sales tax either however all of my boats came from another state.

Mikala 03-13-2019 05:25 PM

Trading boat 4 boat of equal value ARE TAXES DUE ?
 
My point regarding real estate wasn’t related to sales tax per se. I recently bought a house to do a whole house renovation and sell. I bought it for cash and paid significantly less than the county appraiser’s value. I received two separate certified letters from the county appraiser questioning the amount I paid for the house, as well as if it was gifted by a relative. I signed affidavits stating the purchase price and no relations or gift. The reason for the exercise, as best I can tell, is that it messes with the county appraisal database by reducing the price of homes sales and ultimately the property taxes the county intends to steal (and waste) from its residents annually.

Gmarr 03-13-2019 06:22 PM

Quote:

Originally Posted by Mikala (Post 748238)
Not sure about boats (and I cannot imagine it would be different), but when you purchase a car with trade-in you pay tax on the purchase price of the car before the trade is considered. The value of the trade-in is treated as currency toward the purchase.


Now, consider you trade your house for your neighbors house. Good luck convincing your local property appraiser/tax assessor that the value of the transaction was $0.



However- your trade in has value and someone will have to pay for that when they re-register it. The state will then “be whole”

mystery 03-13-2019 07:18 PM

Quote:

Originally Posted by Mikala (Post 748343)
My point regarding real estate wasn’t related to sales tax per se. I recently bought a house to do a whole house renovation and sell. I bought it for cash and paid significantly less than the county appraiser’s value. I received two separate certified letters from the county appraiser questioning the amount I paid for the house, as well as if it was gifted by a relative. I signed affidavits stating the purchase price and no relations or gift. The reason for the exercise, as best I can tell, is that it messes with the county appraisal database by reducing the price of homes sales and ultimately the property taxes the county intends to steal (and waste) from its residents annually.

i believe many stick with the last appraised value unless it sells for more and then they can update to that higher #. otherwise it gets updated in 5 years or whenever they re-do their appraisals. i believe they can also decide to re-assess based on renovations, especially when permits are being pulled it makes it easier for them. i could be mistaken though...

wkearney99 03-13-2019 10:27 PM

Quote:

Originally Posted by Mikala (Post 748343)
My point regarding real estate wasn’t related to sales tax per se. I recently bought a house to do a whole house renovation and sell. I bought it for cash and paid significantly less than the county appraiser’s value.

Heh, we had our old house 'salvaged' for a tax break. This during demolition, and they really stripped it bare. Saved quite a lot of material, which they sold on. Curious how the tax break allowed for 'donating it' at a full appraised value.

This eventually led to the question by the auditors... if you gave away your house, why hasn't your address changed? But with some back/forth letters between us, the accountants and the charity, it all worked out in our favor.

But yeah, the initial inquiry letters had some pretty threatening amounts cited...

ProMaritime 03-18-2019 02:56 PM

Get surveyed values of each boat. This is called a "barter" transaction in tax law. If the values are surveyed to be the same or nearly so then no tax is likely to be be due.

Juggerknot 03-19-2019 12:28 PM

IV. SALES TAX
Florida law requires sales tax to be collected on the purchase price of a motor vehicle, mobile home, or vessel. In the case of a straight sale, six
(6) percent tax will be collected on the total purchase price. Straight sales are those sales that do not involve a trade-in of a motor vehicle, mobile
home, or vessel.
In the case of sales involving trade-ins, sales tax must be collected on the amount of the cash difference between the retail value of the trade-in,
as covered in any official used motor vehicle, mobile home or vessel guide, and the sale price of the motor vehicle, mobile home, or vessel
acquired. The trade-in motor vehicle, mobile home, or vessel may be provided by a third party other than the purchaser. The trade-in motor
vehicle, mobile home, or vessel does not have to be titled in the name of the purchaser, to be used for trade-in credit, as long as the motor
vehicle, mobile home or vessel trade-in and the motor vehicle, mobile home or vessel purchase are part of a single transaction.
In addition to the six (6) percent sales tax, some counties charge a local discretionary sales surtax. Discretionary surtax is calculated on motor
vehicles, mobile homes, or vessels when the residence address of the purchaser on the certificate of title or registration is located within a
discretionary surtax county. The discretionary sales surtax applies to the first $5,000 of the sales price. For more information on the
discretionary surtax you may contact the Florida Department of Revenue or your Florida County Tax Collector’s office.
Sales tax exemption information may be specified on an accurately completed form HSMV 82040, Application for Certificate of Title with/without
Vehicle Registratio

Juggerknot 03-19-2019 12:32 PM

According to FL. Statute, a vessel trade of equal value will incure zero sales tax liability. Knowledge is power, much of the world is suffering a blackout...

Action 03-19-2019 01:40 PM

In 2016 I was a resident of Arizona and purchased a used vehicle in Florida. Paid cash, (well wired money) flew in and drove it back.


Florida used car dealer did not charge any sales tax and gave me a temp license plate. And I did bring my own.


Not sure if that event was an issue for the state of Florida. I wonder if the vehicle were changed to a yacht. Out of state buyer paid cash. Flew in and sailed to the state of residence if sales tax would be collected?


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