Lets Say You Won A Brand New Top Of The Line Rig

[jhoffman]

You were lucky enough to beat the odds and walk away with the ranger in the fish for millions contest, or the gander boat, or ikes boat.

 

Retail value on the ranger is $60,000, the pros boats likely even more.

 

Would the tax burden kill you to the point you wouldnt even be able to keep the boat. We all would love to win a new boat right... or would we?

 

Lets say the taxes are 1/3 you would have to find some way to come up with $20,000 to own that ranger before registration or anything else. A $20,000 brand new ranger is awesome but I dont have 20k laying around.

[slonezp]

Which is why you see so many rigs or certificates for sale. Unless I was fishing out of a POS boat, I'd sell it You have to pay the taxes regardless..

[Nice_Bass]

You don't have to pay it until the next FY taxes are filed so you would have the boat without spending...and you can repay in installments to cover if you choose to the gov't.  Also- would be pretty easy to give the title to a bank and loan 20k on a brand new free and clear rig like that.   Paying interest on taxes is less than ideal, but I would take it in a heartbeat.

[mtaag3]

It's kind of an odd question as even with a $60K boat you're still looking at <$10K in taxes and as someone else mentioned as long as your credit isn't in the toilet you should be able to get some type of loan/lien against the title for the tax.

[slonezp]

It's kind of an odd question as even with a $60K boat you're still looking at <$10K in taxes and as someone else mentioned as long as your credit isn't in the toilet you should be able to get some type of loan/lien against the title for the tax.

10K? You are charged income tax at fair market value and run the risk of entering a higher tax bracket

[flyfisher]

Seems like a no brainer to me.  You keep the boat, take the hit on income tax next year and if you have a boat already, sell it and use that to pay taxes on the ranger.

 

I am not sure what tax would be on a boat but here in VA when you get a car the tax is about 3% so on a 60k ranger would be what, about 2 grand?  Seems like a pretty good deal to me.

 

I also think prizes are taxed differently as far as income goes but i am not sure....either way i am keeping the boat and figuring out how to make it work even if that means borrowing a few thousand to cover the cost of the taxes etc...

[mtaag3]

"Run the risk" does not equal "will". It would really affect those that earn <$120K a year but even then you're talking 28% = $16,800. Also, since I just won a $60K boat I've spent about 2K and started and guide service LLC. That company just bought my 60K boat and now I have the 60K+ write off including the "improvements" I made to the boat. Then the business writes off the cost of the boat. Maybe even look at an ALE assessment. But one thing is for certain is there are ways Uncle Sugar wont get 60K worth of taxes from me.

[derekxec]

yeap either tie the boat up into a business and write it off or i would sell it and buy a flats boat

[TRYTOFISH]

I would sell it and rent a boat!

[RyneB]

I would only sell it because my 18 ft Ranger is all I need. I would love to have a brand new rig, but my garage only allows me to have a 18 footer. I would take the 250 off of it though and throw it on my 18 footer lol.

[Teal]

Less than 10K for a 60k boat...no brainer.

[Gatorbassman]

I'd start guiding full time and write it off. 

[jherm87]

I would either pay the taxes or sell it and pay cash plus taxes on a 40k Ranger or something else

[fl_bass]

Or other thing is if the boat came from a pro its no longer a new boat worth 60k. It has depreciated over the year the pro had it so you would be taxed at the fair market value of the boat. Besides you could alway sell the boat cover the taxes then buy a modest boat free and clear. How much is a beat up pro boat selling for ? . Even if its a brand new boat nothing says you can't sell it for enough to buy a modest boat and still pay off the taxes.

I do like the guiding idea, and I do not believe that you would have to do it full time to take the deductions. As always, consult a tax professsional.

[scrutch]

I'd keep the boat unless it was used to jump waterfalls, then I'd sell it and get another one like it.

[Capt.Bob]

I would sell the Boat and gear it came with pay the taxes, and the Rod Master would get a Huge Facelift. I might find a couple items for the Metal Miss-fit, it and the Rod Master would have plenty of gas money!!

[Skeeter Driver]

Just a outlier thought here .... I wonder if a bank would lend you the money against the valuemofmthe full rig. You don't pay, they get the boat to sell, pay the tax and keep the balance?

[jhoffman]

If they lent you the full value, you would have a salty payment, not a free and clear boat. You could pay all the taxes and fees but I am not sure how that loan works. Do they tack on all the interest the moment you borrow it like a car loan?

[scrutch]

Just a outlier thought here .... I wonder if a bank would lend you the money against the valuemofmthe full rig. You don't pay, they get the boat to sell, pay the tax and keep the balance?

That would be a little hard on the credit score. Two or three, or TEN years later when you want a loan for your dream ride, the bank says "ahhh, NO.".

[Nice_Bass]

If they lent you the full value, you would have a salty payment, not a free and clear boat. You could pay all the taxes and fees but I am not sure how that loan works. Do they tack on all the interest the moment you borrow it like a car loan?

 

They would loan you a portion that you want and rate would be based off of subjective value.  No reason to borrow full value though, just borrow enough to cover taxes, and pay as you go.  interest does start the moment you borrow.

[Ratherbfishing]

I'd immediately go about the task of selling it.  If I kept it, it would then require that I get a heavier/much more expensive truck.  The cost of the new truck and the gas alone would be more than I'm willing to spend.  I'm happy with my aluminum john boat and Toyota Tacoma. 

[J Francho]

I'd sell it.  I don't want a lead sled, new or used.  I'd easily be able to afford a brand new Stroker or Bullet, and have a hand made boat instead of a chopper gun boat.

[kjfishman]

My decision - I am happy with the boats I have so I would sell the boat I won and after taxes probably would have enough left to buy an SRT Challenger and maybe upgrade the Kayak. My wife would want to use the profit to pay down the house and she would probably let me upgrade the kayak.