Should I Buy the Boat for Tax Deduction Purposes?

Hello tax experts! I'm seriously considering purchasing a boat that I would use partially for my business. I own a small photography company that specializes in nautical and waterfront real estate photos. I've been renting boats for shoots, and my accountant mentioned I might be better off buying one and taking a business deduction. The boat I'm looking at costs around $32,000, and I estimate I would use it for business purposes about 60% of the time. The rest would be personal use with my family on weekends. I understand there are depreciation rules and limitations on mixed-use assets. Would this be considered a legitimate business expense? How would I document the business vs. personal use? Are there specific tax forms I need to file? Any advice would be greatly appreciated as I need to make this decision before the end of the tax year.

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18 comments

Adrian Connor

•8M

You can definitely deduct business use of a boat, but you need to be very careful about documentation and actual business purpose. The IRS looks closely at these kinds of purchases because they're often abused. First, you'll need to track business vs. personal use meticulously. Keep a detailed log of every use - date, time, purpose, clients served, etc. Photos with timestamps can help prove business use. For the 60% business use, you can deduct 60% of expenses like maintenance, insurance, dock fees, etc., plus depreciation on that 60%. Since it's over $30,000, it would be considered listed property, which has special rules. You'll report this on Form 4562 for depreciation. Also, be prepared that if business use drops below 50% in future years, you may have to recapture some deductions.

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Adrian Connor

•8M

Financing versus cash doesn't change the deductibility - you can still claim the same percentage of business use either way. If you finance, you can deduct the business portion of interest paid on the loan as a business expense. Regarding Section 179, that's trickier with boats. You generally cannot take Section 179 on watercraft unless it qualifies as "transportation equipment" specifically used in your trade. Since photography isn't transportation-related, you'd likely be limited to regular MACRS depreciation for the business portion. The boat would probably be 7-year property under MACRS rules.

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Ryder Everingham

•8M

I went through something similar with my charter fishing business last year and spent hours trying to figure out the right approach to deducting expenses. I finally found this service called taxr.ai (https://taxr.ai) that was incredibly helpful for sorting through all the documentation requirements. They analyzed my business structure and usage patterns and gave me a complete report on how to properly document everything - seriously saved me from a potential audit nightmare. Their system showed me exactly how to structure my boat purchase to maximize deductions while staying completely within IRS guidelines. They even had templates for tracking business vs. personal use.

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Ryder Everingham

•8M

They absolutely covered dock fees and maintenance - they break down every expense category and tell you exactly what percentage is deductible based on your use case. They even addressed some expenses I hadn't considered, like certain safety equipment that qualified for additional deductions. The analysis took about 3 days from when I submitted my documentation. I was impressed because my situation involved both federal and state considerations. They have different service tiers depending on complexity, but even with multiple revenue streams they can handle it - that was actually my situation too.

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Leo Simmons

•8M

Just wanted to update after trying taxr.ai - it was genuinely helpful for my situation! I have a photography business similar to the original poster and was considering a boat purchase too. The service analyzed my specific situation and showed me that in my case, leasing would actually be more tax-advantageous than buying outright. They provided a detailed breakdown of depreciation schedules versus lease deductions and showed me the exact documentation I needed to keep. They even identified several tax deductions related to my equipment that my previous accountant had missed. Definitely worth checking out if you're making a major purchase decision like this.

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Lindsey Fry

•8M

I see a lot of advice here, but honestly - if you're making a significant investment like this, you need to speak directly with the IRS to get the official word. Trying to get through to them is absolutely maddening though - I spent 4 hours on hold last month trying to get clarity on a similar business asset question. I eventually used this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in under 15 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The agent was able to give me the exact guidance I needed about documenting mixed-use assets. Saved me so much time and frustration.

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Lindsey Fry

•8M

It works by continuously calling through their system until a line opens up, then it calls you and connects you. It's basically doing the waiting for you rather than you having to sit there listening to hold music for hours. It's actually not BS at all. It uses technology to navigate the IRS phone tree and continuously redials when there are disconnects or busy signals. I was skeptical too until I tried it - I had been trying for days to get through on my own with no luck. I was connected within about 12 minutes and got the information I needed about asset depreciation for my business.

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Kayla Morgan

•8M

I need to eat my words here. After my skeptical comment, I decided to try Claimyr because I've been trying to get clarification on business vehicle deductions for weeks. I was connected to an IRS agent in 17 minutes after spending literally DAYS trying on my own. The agent gave me the exact clarification I needed about vehicle logs and documentation requirements. For the boat question, they confirmed that detailed logs showing business use are absolutely critical, and they recommended taking photos of the boat during business activities as additional proof. Wish I'd known about this service sooner - would have saved me so much frustration.

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James Maki

•8M

From what he told me, he didn't have adequate documentation proving business use. He had some receipts and calendar entries, but nothing detailed enough to satisfy the auditor. The IRS agent specifically told him they scrutinize "dual-use luxury items" like boats and RVs extra carefully. His biggest mistake was claiming too high a percentage for business use without documentation to back it up. He claimed 70% business use but couldn't provide logs showing each use. The agent also pointed out that some of his "business" trips didn't align with actual client meetings or listings.

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