buying a boat from a CA LLC

[ljwalters]

Posible new client just emailed me that he purchased a boat from a CA LLC and do I know anything about such transactions.

If he purchased from a nonrelated LLC then this is not a taxable event. If he is related in some way the taxable event go to the LLC not lthe related party. Am I wrong on this?

He is comming by tomorrow to talk.

Am I missing somewthing

[kcjenkins]

I think the important thing, and also the thing clients never want to hear, is that unless he's a commercial fisherman or running a charter boat, etc he can not do a darn thing, tax wise, with the boat. No deduction unless its one of the following: Vessels, barges, tugs, and similar water transportation equipment. Those are 10 yr property.

[jklcpa]

I'm not sure what the question is all about with the boat being purchased from a CA LLC and related party transactions being referred to in the OP.

Could he be asking about the sales tax paid on the boat or about it being used as a second home for mortgage interest deduction?

[ljwalters]

My point exactly, I think the possible client is worrying about nothing. It is only a guess that it mght be a related party since the email mentioned that the broaker recommended an attorney to manage the transfer.

[Lion EA]

I had a client that bought a boat inside a Maryland LLC that some company set up especially for people who already had two homes and could not deduct mortgage interest; owners were LLC members of the LLC that owned "their" property. He was always looking for the latest "deal." I did NOT give him my contact information when I went out on my own, was happy to not have to prepare his returns any longer. (I left HRB before we would've been filing for the year he "bought" the boat.)

[jainen]

>>recommended an attorney to manage the transfer<<

That's to make sure he gets clear title from whatever entity claims to be selling the boat.