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Old 03-11-2019, 01:30 PM   #181
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Respectfully, there is no tax avoidance with an IRA. With a traditional IRA, one "defers" the taxes on the savings. Pre-tax money goes into the account, the account grows, one then pays taxes on the withdrawl. As I plan on buying our retirement house with my traditional IRA (I've been contributing into for the past 35 years), I WISH it wasn't federally taxed as this would be enough to buy my boat!

With the Roth IRA, one saves into the account with 'after-tax' monies.

Either way, Uncle Sam gets his share!

Jim
Jim,

Well, don't believe that's the whole story.... the Roth IRA give one a fairly substantial tax savings, and is especially handy for retirement, when you want non taxable income.

There may be some other IRAs that give that advantage, too.

There are other forms of creating income that is totally non taxable. Yes, you can legally keep it all yourself..... (maybe)
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Old 03-11-2019, 01:31 PM   #182
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If your IRA/401k earned any capital gains or dividends, you'll be subject to ordinary tax rates rather than the lower capital gains and dividends rate when you or any beneficiaries cash out.
Mark,

Can you explain how an IRA earns capital gains? That's a new one for me. As for dividends, they're taxable as ordinary income.
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Old 03-11-2019, 01:55 PM   #183
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Mark,

Can you explain how an IRA earns capital gains? That's a new one for me. As for dividends, they're taxable as ordinary income.
Dividends received in an IRA may be partially capital gains, especially mutual fund dividends. Inside an IRA, it doesn't matter as they'll all be taxed the same when withdrawn. So, by deferring the tax, one might also be increasing it in some cases.
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Old 03-11-2019, 02:18 PM   #184
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How did we go from State registrations & Documentation to arguments about 401K’s and IRA’s?
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Old 03-11-2019, 02:31 PM   #185
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How did we go from State registrations & Documentation to arguments about 401K’s and IRA’s?
Lunacy.
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Old 03-11-2019, 02:55 PM   #186
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How did we go from State registrations & Documentation to arguments about 401K’s and IRA’s?
Easy... we all do it. Called thread drift.

However, saving money for boating thru registration and taxes has similarities to saving tax money elsewhere for boating...... but, it's still drift.
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Old 03-11-2019, 08:46 PM   #187
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Old 03-12-2019, 12:52 AM   #188
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Old 03-12-2019, 07:30 AM   #189
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Image result for dagger in heart pic, end of this thread !
It's like reading a book, only to find the last chapter is missing!

What did you decide was the best possible outcome in this potential scenario?
- no state registration was necessary/required?
- to register the boat in X state?

I'm kinda invested in the thread and would like to know the potential ending

Jim
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Old 03-12-2019, 08:23 AM   #190
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I'm kinda invested in the thread and would like to know the potential ending

Jim
Here’s my take away from this interesting thread:

-If your vessel is documented, you may or may not have to register your boat in your home state. Check your laws.

-There is a difference between registering a boat in a state and having to pay state’s personal property tax. Check your laws.

-If you operate your vessel on the waters of some states, they require you to be registered in that state UNLESS YOU ARE REGISTERED IN ANOTHER STATE. Check their laws.

-You may be at the discretion of the law enforcement officer’s experience and knowledge of other state’s laws if you operate on their waters and are not registered in any other state.

-Tax avoidance is not the same as tax evasion – but there may be a fine line between the two and the state you are in (or its courts) may be the arbiter.

-401K’s are a great investment.

I probably missed a point or two...sorry.
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Old 03-12-2019, 09:23 AM   #191
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I love this, people with big pleasure boats complaining about taxes, who wouldn't love it?
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Old 03-13-2019, 04:22 PM   #192
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I started reading this thread. All I can say is there is a TON of incorrect information. I would HIGHLY suggest reading each individual state's laws/regs for BOTH registration requirements AND taxation (they are usually handled by different departments within the state, regs can be separate, don't assume registration requirements match tax requirements).

I traveled through a dozen states last year. I studied each state's regs. Some were very intricate and open to interpretation but you could do some research and get a sense as to how the state would interpret. There is even case law in some states! Easy to do one thing wrong and mess up, owing a huge tax liability. For example, some states have rules specifically about entering their state with a boat in the first six months of ownership shows intent and you will owe tax immediately EVEN if you only stay a short-time, even under the registration exempted days. In some states, in order to be able to take advantage of a registration or taxation exemption period, your boat may have to be registered in another STATE with a current/valid registration, and for a certain period of time!

As some other posters have mentioned there are not only sales and use tax concerns but property tax concerns in some jurisdictions as well. Some get you if you are in a certain location on a certain date. Some marinas submit a list of all boats that have been to their marina even for a day. Some harbormasters/revenue enforcers will drive around on a boat looking at boats on moorings, at anchor, etc, and keep track. There are horror stories about cruisers getting multiple tax bills while cruising adding up to tens of thousands of dollars. That is why it pays to do your homework and keep a written log, some times even evidence of where your boat was when. Where you take delivery can also have an impact as some states will be owed tax even if the boat is immediately moved out the same day as the closing.
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Old 03-13-2019, 05:55 PM   #193
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There's been a lot of theory here. It would be interesting to hear a first-hand report of anyone innocently "just passing through" a state for a few days, and getting hassled to pay a tax or registration fee.

I have no doubt there are some who test the boundaries, and get caught stepping over the line. But it seems it would be big news if someone was doing everything above-board, was properly paid up in their home state, not trying to skirt any law, and was dinged for normal cruising activities by some other state.
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Old 03-14-2019, 08:20 AM   #194
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There's been a lot of theory here. It would be interesting to hear a first-hand report of anyone innocently "just passing through" a state for a few days, and getting hassled to pay a tax or registration fee.
This is not exactly the case you described, but...I purchased a boat in MD and took it to my home in VA where I paid VA's modest sales tax and registered the boat. There was virtually no personal property tax in the city I lived in. The military relocated me a couple months later to FL. The state of FL allows active duty military to defer registering with the state until their current registration expires (I think mine was a 3 year VA registration). Once my VA registration expired, I was required to get FL registration AND PAY A HEFTY SALES TAX TO FL (with credit given for the taxes paid to VA). It still came to a big slug of money to FL and I wanted to avoid paying that if possible.

My final year of VA registration I hauled the boat and was deployed to Iraq for 12 months and the local tax assessor said he wouldn't assess tax unless I relaunched the boat in FL. He said as soon as the boat touched FL water then both tax and registration would be required.

I retired from the military after returning from Iraq and had the boat trucked back to VA. If I had launched it in FL I would have been responsible for paying taxes and registering the boat. If I just cruised quietly out of state I would likely have gotten away with it, but I would have been in violation of FL laws as my boat was not currently registered in any other state. It's not that I'm a boy scout - but I don't play fast and loose with tax laws.

Oh, by the way. I didn't take tax advice off the internet - I just called the tax dudes and asked them. They were easy to talk to and didn't try to hose me. But just in case, I called from an untraceable phone and didn't give them my name...
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Old 03-14-2019, 09:36 AM   #195
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This is not exactly the case you described, but...I purchased a boat in MD and took it to my home in VA where I paid VA's modest sales tax and registered the boat. There was virtually no personal property tax in the city I lived in. The military relocated me a couple months later to FL. The state of FL allows active duty military to defer registering with the state until their current registration expires (I think mine was a 3 year VA registration). Once my VA registration expired, I was required to get FL registration AND PAY A HEFTY SALES TAX TO FL (with credit given for the taxes paid to VA). It still came to a big slug of money to FL and I wanted to avoid paying that if possible.

My final year of VA registration I hauled the boat and was deployed to Iraq for 12 months and the local tax assessor said he wouldn't assess tax unless I relaunched the boat in FL. He said as soon as the boat touched FL water then both tax and registration would be required.

I retired from the military after returning from Iraq and had the boat trucked back to VA. If I had launched it in FL I would have been responsible for paying taxes and registering the boat. If I just cruised quietly out of state I would likely have gotten away with it, but I would have been in violation of FL laws as my boat was not currently registered in any other state. It's not that I'm a boy scout - but I don't play fast and loose with tax laws.

Oh, by the way. I didn't take tax advice off the internet - I just called the tax dudes and asked them. They were easy to talk to and didn't try to hose me. But just in case, I called from an untraceable phone and didn't give them my name...
I think the mistake you made was letting the registration expire. If you 'transferred' to FL, I dont think you would've owed sales/use tax if the boat was legit bought/stored/used in your state of residence and you were only in FL because you just moved there. FL would've taken your valid/active out of state registration from you. Kind of like when you move and turn in your old state's drivers license to get a new one in your new state. I could be wrong though that is how it works in most states...
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Old 03-14-2019, 11:16 AM   #196
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I think the mistake you made was letting the registration expire. If you 'transferred' to FL, I dont think you would've owed sales/use tax if the boat was legit bought/stored/used in your state of residence and you were only in FL because you just moved there.
With all due respect, that's not true and a good reason to reach out to tax experts. For example, I didn't "let" it expire, it was good for 36 months and at the end of 36 months I could renew in in VA if I moved back (which I did), or I could register it in FL if I remained.

Florida was rather generous to exempt military from the requirement to immediately register when they move. But if at the end of 36 months, had I renewed VA registration but stayed in FL, then I'd be violating their rule of operating the vessel in FL waters over the prescribed number of days, and I would no longer be protected by the military exemption that allows you to keep your current registration until expiration.

The idea that you can pick a state to register a vessel in without some legal nexus is questionable.
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Old 03-14-2019, 11:50 AM   #197
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With all due respect, that's not true and a good reason to reach out to tax experts. For example, I didn't "let" it expire, it was good for 36 months and at the end of 36 months I could renew in in VA if I moved back (which I did), or I could register it in FL if I remained.

Florida was rather generous to exempt military from the requirement to immediately register when they move. But if at the end of 36 months, had I renewed VA registration but stayed in FL, then I'd be violating their rule of operating the vessel in FL waters over the prescribed number of days, and I would no longer be protected by the military exemption that allows you to keep your current registration until expiration.

The idea that you can pick a state to register a vessel in without some legal nexus is questionable.
I just re-checked the regs. Very quick review but I think that I am right. If the boat is purchased, stored, registered, and used outside of Florida for >6 months, and you subsequently move into Florida, no sales/use tax is due. Same for vehicles. No one would want to move to Florida from other states if they had to pay sales/use tax on boats and vehicles they already own...
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Old 03-14-2019, 12:00 PM   #198
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Thank you for confirming that and if you checked it in the law/reg then I'm sure you are correct. However, I only owned the boat in VA for a few months before being reassigned to FL; well below 6 months, which is why I had most of my 36 months of registration still available after moving.
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Old 03-14-2019, 12:12 PM   #199
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Thank you for confirming that and if you checked it in the law/reg then I'm sure you are correct. However, I only owned the boat in VA for a few months before being reassigned to FL; well below 6 months, which is why I had most of my 36 months of registration still available after moving.
ah i see. bummer. if you just waited a couple more months you would've been good to go.
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Old 03-14-2019, 12:18 PM   #200
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bummer.
Yep! But I was a Special Forces officer and we kept a pretty hot OPTEMPO. We'd try to game the system where appropriate, but at a certain point you just pay your tax and spend your down time enjoying the boat!

In my case I got lucky because I never had to pay the FL tax. But I wasn't going to make any Herculean efforts to avoid it if it didn't work out.
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