chartering your boats?

[Little Dandy]

How many are chartering their CCs? What size CC? Likes and dislikes for your particular fishing? I don't currently but, I'm toying with the idea of making my boat earn at least part of it's keep.

I like the fact its easy to clean up at the end of the day. Love the ride and ability to cover water faster than most other fishing boats, especially when conditions are less than ideal. Wish I had more room for guests and more seating, it gets kinda crowded with more than 4 aboard. We're doing what you guys would probably call slow trolling (1.5-3.5 knots) for salmon and walleye.

[Bluefin 32]

Not meaning to lecture but have you already done the research on USCG license requirements, insurance costs, legal liabilities, impact on warranties, limitations at marina, etc etc? Not something to be undertaken casually to make few extra bucks on the side for fuel.

Chartering is a tough business unless you are confident you will have a good customer base and are careful about the legal issues. One accidental injury to a customer and you could be in a Dickensian lawyer hell for years and lose everything if you are not careful.

[Little Dandy]

Actually, I've been looking into this for a while now. The points you bring are good ones and I have looked into each of them, with the exception of warranties. If I decide to go this route, it wouldn't be until at least the '09 season.

[baitbox]

I charter my 35ft CC and had a 28 CC before this that I also chartered I do this as part time and my insurance co limits my charter trips accordingly, You can go to my web site TailDancer .com for more info. Capt Jim

[kingpin]

charter

I charter my 28.... it has a pair of 4btas.. they have run great.. just keep up with the injectors.
The boat is insured as well as liability thru Atlas Ins. in Florida... i believe it costs about 3,000 a year, price may be diffrent since I operate the vessel outside the US (CR).
I keep the crew @ 4 anglers and never run the boat over 2,400 rpm... and that gets me 20-22 knots depending on sea state. Tru cruise is around 2,600
The boat gets exceptional range.

[JuliaGCC25]

charter issues

Some things to consider:

USCG License - OUPV at minimum. Course is NOT free.

Insurance - Some carriers will permit a limited # of charters for an additional flat fee plus additional $ for each additional charter above that number.

Documentation - If vessle is documented, you may need to re-document to reflect a charter function.

Personal Liability - Geezzz, put the whole thing into an LLC. This will cost $ to do.

Advertising - You will need to support any challenge by the IRS for deductibility of expenses and depreciation. Therefore, you will need to show a legitimate attempt to offer the boat for charter. Print advertising or a web-page are advised.

Record keeping - You bet ya! Careful records documenting the time used for charter versus total hours used.

Passengers - where will you pick them up and drop off?

[Hawk]

I charter my 28 part time. It is a bit expensive to get the business set up properly .You should set up a LLC and get a good liability policy. You should also have an attorney write some kind of contract for your customers to help control the amount of damages you could face if something goes wrong. If you set up the whole business properly you will have a mighty fine tax write off, the boat, fishing gear,matinence,dock ect.You don’t have chance to make money with all the expense but you can write it off for up to three years until the IRS will consider it a hobby. The tax write off is where the money to be made

[JohnD]

Well excuse me.. but "The tax write off is where the money to be made" doesn't make enough sense to me.

Maybe I'm just not making enough money, but in my experience is that to 'write-off' something you first have to write a check.

I have no problem writing checks to keep my little CC - and my other toys - but hard pressed to believe you can make money with write-offs. Teach me something folks.

Bottom line on this Wed of a week from hell in the 'market'. I would much prefer to enjoy my Carolina Classic as it depreciates... then the "fun" I haven't had watching my 401 go to hell in the past few months. I should have bought a 32 or 35 - I would have enjoyed that even more.

As to 'chartering'. I know guys who charter and Capt. (Often not the same). I accept personal contributions for fuel when my buddys and I fish together. Technically that is chartering! But I do not have my 6-pack, I do not advertise, I am NOT professional nor do I have my Capt Lic. Yeah, I know if people give you cash or in-kind donations when we fish together that is legally 'charter', but ....

Open invite -members of CC Forum, if you find yourself in East Central FL and would like a ride to troll for dolphin, sails or even Kings, call me. If I'm in town and weather looks decent, love to take you. Bring beer, bait, brush to wash-down, a great attitude and if you want to toss in for the gas it will be appreciated. But I am not a Capt, not insureded to charter and heck, it's fishing.. not catching, so we enjoy.
johnd

[CClassic28]

As to 'chartering'. I know guys who charter and Capt. (Often not the same). I accept personal contributions for fuel when my buddys and I fish together. Technically that is chartering! But I do not have my 6-pack, I do not advertise, I am NOT professional nor do I have my Capt Lic. Yeah, I know if people give you cash or in-kind donations when we fish together that is legally 'charter', but ....

Open invite -members of CC Forum, if you find yourself in East Central FL and would like a ride to troll for dolphin, sails or even Kings, call me. If I'm in town and weather looks decent, love to take you. Bring beer, bait, brush to wash-down, a great attitude and if you want to toss in for the gas it will be appreciated. But I am not a Capt, not insureded to charter and heck, it's fishing.. not catching, so we enjoy.
johnd[/QUOTE]



Actually, chipping in for gas, bait, food... does not constitute a charter. I brought the same question up this past winter when I got my captians license. So rest assured you have no liablitiy.


Chris

[Hawk]

Well excuse me.. but "The tax write off is where the money to be made" doesn't make e

The comment I made is based on the fact if you have spent for argument sake 150K on a boat, 10K on equipment and roughly 10K a year on operating expenses then you are spending money that you must have earned from in ligament faction. You would have certainly paid taxes on that money. By setting up a small corporation and making the personal contributions to start up your charter business it would allow you to depreciate the coat of the boat and equipment over a few years as well as write off all associated expences.This should allow you to recover a large portion of tax money that you paid on your regular income. The idea is that you were going to spend the money on your boat every year regardless that setting up and operating a small charter business would allow you to write off these expenses.

[Agitator]

Chartering

I have no problem with anyone who uses their skill as a captain and fisherman to help defray the cost of boat ownership; in fact, I'm jealous. I do not have the skill and do not want to deal with the liability. However, back in the day, I owned a business that lent itself to entertaining customers and suppliers on my boat. I learned from my CPA that if I carefully documented that use and recorded all of the expenses of ownership, like maintenance, fuel, insurance, slip fees, etc., that I could deduct the portion of the cost of ownership that was "a non-reimbursed business expense." If, for example, I put a total of 100 hours on the boat and 30 hours were utilized entertaining for business purposes, then 30% of the cost of ownership and operation, as well as some depreciation, were deductible. Per the guidance of my accountant, business utlilization should not be over 40%. I would suggest that it is not unusual for boat owners who are in business to have customers, suppliers, bankers, insurance guys, etc. on their boats with some frequency.

From 1985 until 1996, my company owned the boat and all of the fishing gear. I never chartered, nor collected funds from those who fished and boated with me, but did do a lot of business fishing and boating. In 1993 I survived a full blown IRS audit; the log was very detailed. Check with your CPA; the laws are constantly changing, but I am confident that whatever the tax guys in Washington come up with a good tax guy can "work with."

I am now just like most of the rest of you...paying the price with no tax deals, but I am always looking....

AGITATOR

[katman]

And if you pay income taxes those deductions to gross income will make you feel a lot better than writing a large check to the IRS plus you have enjoyed some fishing.

[JohnD]

Hawk: thank you. That does make sense.
One question: how do you get away spending so little


Chris 'Actually, chipping in for gas, bait, food... does not constitute a charter. I brought the same question up this past winter when I got my captians license. So rest assured you have no liablitiy."
I am not doubting you.. however I have 'heard' otherwise. I'm really not that concerned as sharing costs (and with today's fuel prices) this is common practice, but I have heard that technically this is a 'charter'. If you can point me to regulations, rulings, etc that confirm what you were told, would greatly appreciate.

JohnD

[CClassic28]

John,

I was informed of this from my instructor, Capt. Bill Rivera from Nautical School where I earned my Masters License over the winter. He as the owner of Nautical School is in close contact with the USCG and has confirmed that information. I do believe I remember him stating that at one point there was a ruling stating that any form of compensation constitutes a charter, but that ruling has been changed. I am sure you could contact the USCG for confirmation.


Chris

[JuliaGCC25]

what is a charter

In my opinion, the term charter represets a vessel for "hire." If you are taking your friends out for a fishing trip and they chip in for expenses, I think a court of law would have a hard time establishing the fact that you held your boat out for charter.