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Old 12-14-2019, 08:46 PM   #1
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How to legally offset operating expenses without a Commercial License

I always told my daughters that the way to find happiness is to find your passion and then find some way to get someone else to pay you to pursue it. You will never feel like you worked a day in your life since it's so much fun to go to work. In retirement, I began to think the same way again and had an idea about photographing bridges in the California Delta as a summer project. As an engineer, pilot and air traffic controller, I always appreciated good engineering with form AND function.

I've been having fun this past summer touring 25 California Delta Bridges in 25 days as a fun thing to experience, photo and write about. It also seemed like a good opportunity for legal revenue/tax write-offs to help by offsetting some of the expenses of operating a boat on a budget. As it turned out, it was the very best summer of my life, HANDS DOWN!! I came home with over 3000 photos of our beautiful California Delta bridges...all visited by boat in the course of 25 days and nights.

My daughter, a pro photog and editor for Getty Images, gave me a BD gift of free editing of my photos for a calendar, so now I'm offering professionally edited 8x11 2020 @DeltaBridges calendars for sale on the side as a hobby. I don't expect to actually make a profit this year but I figured it's worth a shot. (See my link below if you like bridge calendars.)

I'm sure there are several folks who would like to know what you do to make boating more affordable for you. What do you LEGALLY to help offset the expenses of the lifestyle you love.
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Old 12-14-2019, 09:21 PM   #2
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That's a great project! I've always been fascinated by architecture, enjoyed photography and imagined myself doing something similar. I'm also partial to abandoned buildings, especially old barns and such.

But nowadays, everyone's got a camera in their phone and fancies themselves a photographer. Even if they don't know enough to hold the phone in "landscape" mode. YouTube is full of poorly filmed and even more poorly edited "abandoned places" videos. Nobody buys "coffee table books" of photography any more. I think I missed my chance.
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Old 12-14-2019, 09:24 PM   #3
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This could turn out to be a very interesting thread you started WKBO.
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Old 12-14-2019, 09:58 PM   #4
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I run my wholesale electrical supply business from my boat.

I worked with my tax CPA very closely and I am able to write off all telecommunications, networking, and computing equipment that is installed, including my KVH satcom system. This along with recurring service charges.

There is a important point to make though. I do not have things that reduce my boating expenses. I have things that enable my business to function and for me to make a living while I happen to be on my boat.

There are no special accounting tricks. I just pay for anything that is directly business related using corporate funds, and account for those purchases just like my land based office.

Perfectly legal, and if I ever get audited it is all very defendable.

The key to business expensing is that your business has to have a reasonable expectation to make a profit. The IRS is very quick to disallow “business” endevors that exist only to allow the deduction of hobby expenses.
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Old 12-14-2019, 10:20 PM   #5
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Have no write-offs. It is standard deduction for me, and see no hope otherwise. ... FlyWright about to come under the Golden Gate Bridge, heading west. (January 2014):
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Old 12-14-2019, 10:37 PM   #6
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Al, with your successful fishing experience, perhaps you could operate fishing outings for profit/hire. Not that I recommend it.
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Old 12-14-2019, 11:17 PM   #7
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I charter my boat out. Theoretically, if I get a typical number of charter bookings, the boat completely pays for itself, including loan payments, moorage, maintenance etc. For various reasons charter bookings were low last summer so we were in the red, I have high hopes for next season.

The downside to chartering the boat out are obvious. Sure, I can use my own boat any time I want, but I'm losing that potential charter income if I do it. Also, to keep within tax regulations, any time I take my boat out I need to basically charter it to myself. The charter company of course waves the charter fees, but I do need to pay tax on the normal charter fee. Not to big a deal.

The upside is my boat is always impeccably maintained and cleaned.
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Old 12-15-2019, 12:05 AM   #8
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Quote:
Originally Posted by johnrupp View Post
this could turn out to be a very interesting thread you started wkbo.
wkbo?
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Old 12-15-2019, 02:08 AM   #9
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Cool project

Once I retire (next fall) our plan is to sell photographs taken while exploring BC's north and central coast. My wife covers wildlife and macro photography while I lean towards the scenic fine art end of things.

I used to produce selenium toned silver gelatin black and white fibre based prints enlarged from 4x5 negatives using pin registered sharp and unsharp masks, but after taking it as far as I could, something seemed missing.

Now working towards limited edition polymer photogravures using digitally enlarged negatives made from scanned 4x5's and digital photos from a Fujifilm X series mirrorless camera system.

Dare to Dream!
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Old 12-15-2019, 02:47 AM   #10
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Quote:
Originally Posted by FlyWright View Post
https://www.facebook.com/groups/deltabridges
Requires a Facebook account/login to see anything.

Sorry, not goin' to happen (for me at least).
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Old 12-15-2019, 07:28 AM   #11
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I'm no where near Al's level of enjoyment / satisfaction but it helps offset some boat expenses.
When I retired I found a hardly used Sailrite sewing machine to do some of my own canvas work.
When others in my marina saw the results I quickly had requests for work.
I have been selective in choosing which to take on in order to:
1) Prioritize those I could easily barter with... diesel and hydraulic mechanics are a couple of repeat & satisfied customers
2) Keep the jobs small and within my skill level to ensure satisfied customers.
3) Small jobs to keep $ small for those not bartering and remain a hobby to avoid reporting
4) No advertising - just word of mouth and marina folks I knew and liked
Bottom line this wasn't a get rich quick scheme but rather one that facilitated building skills and offsetting costs to expand my capabilities. I now turn down more work than I take on and can be VERY selective on customers to keep satisfied.
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Old 12-15-2019, 08:28 AM   #12
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From my boat, I run a foundation on behalf of a retiree that funnels money out of his bank account and into the marine parts and services industry. So far, itís exceeding my wildest expectations, to the point of maybe taking on partners via setting up a GoFundMe site. Any interest out there?

(Seriously, Al, cool idea. Wish my Facebook aversion didnít keep me from seeing some of your work.)
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Old 12-15-2019, 08:59 AM   #13
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I was wondering how these YouTubers fund their boating trips?They certainly put a lot of work into creating and editing their episodes. Wonder what the write off options are for them. (It also helps to look like Barbie & Ken).
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Old 12-15-2019, 09:43 AM   #14
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Flywright: I encourage you to google "hobby losses" and "IRS Section 183". I can assure you that having worked 33 years in Federal taxation, your "business" does not qualify for expense deduction beyond any revenue you may derive from the sale of photographs. In order to write off any more than that requires that you intend to make a profit. By your own statement, it is a hobby and you do not expect to make a profit. This is fatal to your interpretation of the law. I'm sure you are a competent engineer and pilot and probably photographer but not so good at tax law. You may want to re-think this before putting this on your tax return. Sorry to burst your bubble but good luck with selling your photos.

As for photography, I am a pretty good analog photographer (4" x 5" negatives) using Speed Graphic, Crown Graphic, and field cameras. When we had a dirt house, I had a terrific darkroom in the basement. Living on the boat, I can only develop negatives. An enlarger for printing negatives is not possible. However, I do scan my negatives which actually works quite well.

Quote:
Originally Posted by FlyWright View Post
I always told my daughters that the way to find happiness is to find your passion and then find some way to get someone else to pay you to pursue it. You will never feel like you worked a day in your life since it's so much fun to go to work. In retirement, I began to think the same way again and had an idea about photographing bridges in the California Delta as a summer project. As an engineer, pilot and air traffic controller, I always appreciated good engineering with form AND function.

I've been having fun this past summer touring 25 California Delta Bridges in 25 days as a fun thing to experience, photo and write about. It also seemed like a good opportunity for legal revenue/tax write-offs to help by offsetting some of the expenses of operating a boat on a budget. As it turned out, it was the very best summer of my life, HANDS DOWN!! I came home with over 3000 photos of our beautiful California Delta bridges...all visited by boat in the course of 25 days and nights.

My daughter, a pro photog and editor for Getty Images, gave me a BD gift of free editing of my photos for a calendar, so now I'm offering professionally edited 8x11 2020 @DeltaBridges calendars for sale on the side as a hobby. I don't expect to actually make a profit but I figured it's worth a shot. (See my link below if you like bridge calendars.)

I'm sure there are several folks who would like to know what you do to make boating more affordable for you. What do you LEGALLY to help offset the expenses of the lifestyle you love.
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Old 12-15-2019, 10:14 AM   #15
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When I was exploring avenues to write off some of my boat expense with a qualified tax attorney he really cautioned me. There is a huge difference in what someone may be able to submit to the IRS and even get away with for a while, maybe even forever and what will survive a tax audit.

And once you get audited the fines and penalties can be killers.

To the O.P. GREAT, CONGRATULATIONS on making some money while on your boat. Take the income, declare it and enjoy what is left. Attempting to write off part of your boat expense is best left to full timers like dive boats, tour boats, fishing charters. Even then, it is risky.

pete
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Old 12-15-2019, 10:17 AM   #16
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Quote:
Originally Posted by Slowpoke View Post
I was wondering how these YouTubers fund their boating trips?They certainly put a lot of work into creating and editing their episodes. Wonder what the write off options are for them. (It also helps to look like Barbie & Ken).

If they've got enough viewers and can monetize their YouTube videos (ads, etc.) they get paid for people watching their videos. So they're basically selling a window into their life to fund living that life.
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Old 12-15-2019, 10:59 AM   #17
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Originally Posted by catalinajack View Post
Flywright: I encourage you to google "hobby losses" and "IRS Section 183". I can assure you that having worked 33 years in Federal taxation, your "business" does not qualify for expense deduction beyond any revenue you may derive from the sale of photographs. In order to write off any more than that requires that you intend to make a profit. By your own statement, it is a hobby and you do not expect to make a profit. This is fatal to your interpretation of the law....
In Canada, I believe the federal government doesn't want to hear from artists about deductions until they make over $20,000.00 in a year from the sale of their art works. Here's hoping I pay taxes!!!!!

Our photographic goals are to have it self-fund itself in the way of supplies and occasionally new camera/darkroom/etching press equipment, and in a perfect world, help with the operational costs of our boat.

Quote:
Originally Posted by catalinajack View Post
As for photography, I am a pretty good analog photographer (4" x 5" negatives) using Speed Graphic, Crown Graphic, and field cameras. When we had a dirt house, I had a terrific darkroom in the basement. Living on the boat, I can only develop negatives. An enlarger for printing negatives is not possible. However, I do scan my negatives which actually works quite well.
You must know about APUG (Analog Photographers Users Group) that has now grown with the times and is now Photrio for analog, hybrid and digital photography? HUGE amount of experience and information there:

https://www.photrio.com/forum/

Just between us large format photographers...here's a fun 4x5 handheld f2.5 SLR (yes, I said f2.5 and SLR!) camera I heard about recently. A real beast, and a significant departure from the f64 Group everything in focus aesthetic, but interesting nonetheless:

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Old 12-15-2019, 11:00 AM   #18
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I edited the first post by adding a photo of the calendars and will post a few sample pics here to show some of the shots for those without Facebook access. Feel free to PM me if you're interested in seeing more or need contact info.
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Old 12-15-2019, 11:11 AM   #19
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Long ago when I had a job requiring I work inside all day I would use my tractor to bush hog field and building lots, plow and till gardens, and some snow plowing in winter. Just to get outside and some fresh air. One time I got the idea to deduct some expenses so I talked to a friend who was a CPA I believe. His advice. "For what you hope to claim and to avoid the hassle's, Federal and domestic, take your wife out to dinner more often."
Wise advice...
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Old 12-15-2019, 11:14 AM   #20
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Quote:
Originally Posted by Pete Meisinger View Post
When I was exploring avenues to write off some of my boat expense with a qualified tax attorney he really cautioned me. There is a huge difference in what someone may be able to submit to the IRS and even get away with for a while, maybe even forever and what will survive a tax audit.

And once you get audited the fines and penalties can be killers.

To the O.P. GREAT, CONGRATULATIONS on making some money while on your boat. Take the income, declare it and enjoy what is left. Attempting to write off part of your boat expense is best left to full timers like dive boats, tour boats, fishing charters. Even then, it is risky.

pete
"And once you get audited the fines and penalties can be killers."

pete: You received good advice from your attorney. I was once involved in an audit where the individual was offered a good compromise settlement but who decided to press forward with his bogus tax shelter arguments. Fast forward two years - he ended up paying over $1 million more, all interest and penalties.

The IRS is a shadow of its former self due to relentless massive budget cuts. Literraly, there are almost no cops left on the beat. This is not good for honest taxpayers. The chances of getting caught speeding by the IRS are lower than ever but, folks sometimes get caught in the most unexpected ways. Beware.
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