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Waterskiing as a write off

HortonHorton Posts: 28,973 Administrator
It should no surprise that I have get to write off a lot of my ski expenses. I know a few other skiers who that have small ski businesses so they can write off ski expenses. You guys thought about this as a way to save money? Ideas for your fellow Ballers?

 

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Comments

  • BraceMakerBraceMaker Posts: 4,243 Mega Baller
    Perhaps organize a camp for person's with disability and ski in the downtime? Good cause and offset the costs?

    Skoot1123
  • HortonHorton Posts: 28,973 Administrator
    @MattP but you are famous

     

    Support BallOfSpray by supporting the companies that support BallOfSpray

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    Masterline ★ McClintock's ★ Performance Ski and Surf ★ Reflex ★ Radar 

    Stella Blue ★ Stokes ★ World WaterSki League

     

  • MattPMattP Posts: 6,113 Mega Baller
    edited January 2013
  • HortonHorton Posts: 28,973 Administrator
    @BraceMaker that is an awesome and admirable idea but not really what I mean. I mean how can the average Baller write off his gas without a massive undertaking.

    The guys that do D3 promo have it licked. They promote D3, sell some skis and can deduct all their boat gas and ski expense.

    I can tell you that when I write off gas it always goes in a boat and never my truck :- )

     

    Support BallOfSpray by supporting the companies that support BallOfSpray

    Connelly  ★ Basta ★ DBSkis ★ Denali ★ Goode ★ Hobe Lake ★ HO Syndicate ★ MasterCraft

    Masterline ★ McClintock's ★ Performance Ski and Surf ★ Reflex ★ Radar 

    Stella Blue ★ Stokes ★ World WaterSki League

     

  • lpskierlpskier Posts: 2,716 Mega Baller
    I tow a pro shop in a box trailer to the tournaments I attend.
    John Wilkins- Si non pro sanguine quem ludus ne. #iskiconnelly
  • BraceMakerBraceMaker Posts: 4,243 Mega Baller
    OK, vinyl wrap your boat and use it like mobile advertising while driving to/from the lake?

    In that way any time "on the water" is advertising costs.

    Sponser a collegiate ski team (non-profits) and host them at your site? I think that's almost like a camp for persons with disability (depending on the team).

  • HortonHorton Posts: 28,973 Administrator
    edited January 2013
    @BraceMaker
    I think you have to make money for it to be a write off

     

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    Masterline ★ McClintock's ★ Performance Ski and Surf ★ Reflex ★ Radar 

    Stella Blue ★ Stokes ★ World WaterSki League

     

  • RichardDoaneRichardDoane Posts: 4,359 Mega Baller
    "write-off's" are expenses used to decrease income that will eventually be taxable, so as long as the expenses of waterskiing can be legitimately used as a form of entertainment of your company's customers/clients, then 50% of those entertainment dollars can be used
    BallOfSpray Pacific Northwest Vice President of Event Management, aka "Zappy"
  • MattPMattP Posts: 6,113 Mega Baller
    Not totally sure where my first comment went.
  • WaternutWaternut Posts: 1,511 Crazy Baller
    I was joking around with friends about this. My thought was that waterskiing in tournaments would be a second business. Then all the gas, boat costs, new ski's, etc could be seen as a business expense. Might have to prove you are winning some money though but just because your business loses money doesn't mean it isn't a business. If you trained an employee, you could write that off so I don't see why you can't train yourself. I wouldn't really want to explain that to the IRS if I got an audit though...haha

    I know people who do promote their business with boats, boat signs, lure customers with rides, etc. Can I say I'm networking by having friends out on my boat?
  • aswinter05aswinter05 Posts: 363 Baller
    I'm a CPA in central Indiana. I get to prepare more than 310 tax returns each year. Mainly for farmers, partnerships, corporations, and small business owners. If any of you guys have tax questions don't hesitate to give me a shout. Free advice to fellow ballers!
    MattP
  • Razorskier1Razorskier1 Posts: 3,425 Mega Baller
    Agree with @richarddoane -- I know guys who have used it as client entertainment and turned it into a business expense. Wish I had some clients that chased buoys!
    Jim Ross
  • WaternutWaternut Posts: 1,511 Crazy Baller
    edited January 2013
    Some states let you get a refund for fuel used "off road". This is because you pay a road tax on fuel at road gas stations but your boat doesn't put any wear and tear on the roads. Only some states do it and it doesn't seem to be much but maybe it'll buy you another tank of gas at the end of the year... http://www.americanboating.org/fueltax.asp

    Well I work for the government so writing off fuel expenses for anything would likely be seen as a conflict in interest by most people. Maybe I could say I'm making a charitible contribution to improving the lives of our military personnel...there is absolutely no question about that since my boat is usually full of military people and I get reimbursed sometimes for the gas used but it's never enough to cover the expenses.
  • aswinter05aswinter05 Posts: 363 Baller
    edited January 2013
    @jfw432 There's actually a credit for fuel tax on the Federal tax return. Some states may allow it, yes, but everyone who files a 1040 and is eligible for a fuel tax (reimbursement) can claim this credit. It's on form 4136. Of course, the fuel must be used for business purposes. Just because I drive a dirt-bike in the woods on weekends for fun doesn't entitle me to this credit. The credit is a "refundable credit" which means you don't have to have tax liability to use the credit (money directly back in your pocket). Currently the credit is equal to the amount of gallons for off-road use multiplied by $0.183.

    Also, there's no such thing as a charitable contribution for improving the lives of our military personnel (unfortunately). Contributions generally only qualify if they are donated to an organization categorized as a 501(c)(3).
  • WaternutWaternut Posts: 1,511 Crazy Baller
    edited January 2013
    @aswinter05 Thanks for the info on the federal tax credit on gas. I was honestly joking on the military thing and even if I could write it off, I seriously doubt I ever would because I wouldn't be diligent enough to document and track it. It's fun for me and completely worth the expenses. It just sound like some bogus crap that someone would try to claim is all...kind of like the people who write off a boob job as a medical expense even though the law specifically states you can't do that.

    edit: That federal tax credit on gas specifically states it cannot be used on a motorboat unless it's used for commerical fishing.
  • RichardDoaneRichardDoane Posts: 4,359 Mega Baller
    @jfw432 - you just perfectly described the INT's beginnings in your first comment
    BallOfSpray Pacific Northwest Vice President of Event Management, aka "Zappy"
  • BraceMakerBraceMaker Posts: 4,243 Mega Baller
    Get yourself a laptop and a 4g hot spot and you've got yourself a mobile office - complete with video conferencing, and a conference table (engine box)
    MattP
  • aswinter05aswinter05 Posts: 363 Baller
    @jfw432 Thanks for the info about disallowed credits on motorboat fuel. I had never looked that deep into the credit. We typically take the credit for farmers using their non-diesel tractors strictly on the farm. I've still yet to prepare taxes for a client that uses a boat in their business, but now I know it's only allowed for commercial fishing :) interesting.
  • ScaredOfCorbetsScaredOfCorbets Posts: 87 Baller
    Just curious on how much write offs are we talking here. Are we talking about cost of boat, skis, bindings, tow vehicle, etc. Are we talking about thousands or hundreds?
  • klindyklindy Posts: 2,415 ★★★Triple Panda Award Recipient ★★★
    Since USAWS is a 501(3)(c) is it possible to write off some expenses for attending tournaments as an official/driver/etc. Same for clinics, board meetings, etc. There are some rules that apply so consult a tax professional.
    Keith Lindemulder
    AWSA Vice President
    AWSA Southern Region EVP
  • 6balls6balls Posts: 5,345 ★★★Triple Panda Award Recipient ★★★
    If I teach at a camp, isn't all my skiing a necessary business expense to keep my skills up and thus my credibility as a coach? Those tourney scores and averages are important too? Yeah...and while I'm at it if I didn't get some pro coaching in Acapulco I wouldn't be able to teach these kids as well either...yeah, that's the ticket!
    Dave Ross--die cancer die
    RichardDoane
  • RichardDoaneRichardDoane Posts: 4,359 Mega Baller
    @6balls - I like how you think
    BallOfSpray Pacific Northwest Vice President of Event Management, aka "Zappy"
  • ScaredOfCorbetsScaredOfCorbets Posts: 87 Baller
    Sounds like it's a worth the effort to grab the deductions, if we're talking thousands.
  • aswinter05aswinter05 Posts: 363 Baller
    edited January 2013
    Hobby Losses are HUGE targets for IRS audits by the way. Being able to justify that you are " actively seeking a profit" is crucial when taking deductions against your self-employment income. Also, as a rule of thumb, the IRS typically won't raise any questions as long as a business shows profits 2 out of 5 years (some recent court cases suggest 3 of 5 years). If you were ever questioned about a deduction against your "ski business income", you would need to prove that the expenses were necessary for the operations of the business.
    A_B
  • klindyklindy Posts: 2,415 ★★★Triple Panda Award Recipient ★★★
    And what about the "donation" of time/money/expenses to USAWS (a 501(3)(c)) in the form of working at tournaments and attending meetings and clinics, etc.? Costs incurred would be gas/mileage, hotel, meals and other travel related expenses. Of course I suspect any direct monetary contributions would be deductible.
    Keith Lindemulder
    AWSA Vice President
    AWSA Southern Region EVP
  • PBDPBD Posts: 190 Baller
    I had a neighbor where I ski that had all of his guests sign his "guestbook/client list" for the supposed ski school he was running. His reasoning was he could take deductions for the costs he incurred "running" this school when in fact all he had done was invite friends and family out to ski with him. He did give tips on how to improve and did teach some folks to ski but this was in no way a business. I don't believe he ever put the deductions on his return but he had the paper trail in place.
  • aswinter05aswinter05 Posts: 363 Baller
    @klindy even though USAWS is non-profit, it specifically states in IRS Pub. 526 that donations to "social and sports clubs" are disallowed as charitable donations. Non-Profit (i.e., 501(c)(3)) is just the first requirement for donations to qualify as charitable donations. The next requirement is that the organization is a charitable organization.
  • KelvinKelvin Posts: 1,196 Mega Baller
    USA Water Ski Inc. is a Section 501(c)(3) public charity and contributions can be deducted as a charitable contribution. The types of qualified organizations in Publication 526 include certain organizations that foster national or international amateur sports competition. Additionally, USA Water Ski Inc is included in the list of qualified charitable organizations on the www.irs.gov/charities website.
    Kelvin Kelm, Lakes of Katy, Katy Texas
    aswinter05
  • aswinter05aswinter05 Posts: 363 Baller
    @Kelvin solid find as I stand corrected. Thank you for the research. It looks like several other waterski clubs can be found as well through that link.

    In that case, @klindy most of the expenses you mentioned related to USAWS would be allowable on your Schedule A. Mileage is taken at a standard rate. It includes gas and basically any other necessary expenses for operating a vehicle. The charitable mileage rate is currently $0.14 per mile (not much but still something).

    There's not really such thing as a donation for "time". Meals and entertainment and travel costs are allowable if it is "necessary" for you to be away from home overnight in order to provide services to the organization.

    The only thing you need to really be careful with is whether or not you are receiving a benefit in return for your donated money. You are supposed to back out any "benefits" you receive in return for donations, etc. Also if you donate property, but the property is returned to you at the end of the event, no donation has technically been given.
  • The_MSThe_MS Posts: 5,589 Member of the BallOfSpray Hall Of Fame
    I am reporting all of you to Obama
    Shut up and ski
    GroovyGrant
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