I had a boss once who avoided paying taxes on his 49’ sailing yacht by “donating” it to his church. It was then technically owned by the church (so no taxes, either transfer or property) but he still used it exclusively.
You can probably report that to the IRS right now.
This is just plain incorrect.
The law doesn’t allow CEOs to write off yachts.
Whether or not regulators investigate them is another matter.
Can’t they just buy in the name of a company, which would be a ‘business expense’, which is kind of a write off?
They would have to justify how it is a part of the companies operations. In theory at least.
So a private jet to fly your execs to business meets? Ok.
A yacht? Maybe for entertaining customers? I don’t know about the US, but here in Australia entertainment expenses are written off at a lower rate than other business expenses.
here in Australia entertainment expenses are written off at a lower rate than other business expenses.
Sorry mate. Not really correct.
If an Australian company pays for entertainment expenses for staff, it’s considered a fringe benefit and fringe benefits tax is payable. It equates to almost the cost of the actual expense. So if a company pays $10k for an employee to take a holiday, they’ll have to pay almost $10k in fringe benefits tax, but they do get a deduction for the whole $20k, which will save them $5k in income tax.
Yeah, so to simplify, written off at a different rate.
Not really, at all.
It’s written off at the same rate, while being subject to a whole other type of tax, which means the company pays more tax, rather than less.
Ok, so the point I was originally trying to make was that claiming a yacht as an entertainment expense was less attractive. Would you agree?
If sticking a fork in your eye is “less attractive” than eating icecream then sure.
… but let’s be honest, that’s not what you were trying to say. You were just plain wrong. Get over it. No one cares.
