Originated From
RealEstateProArticles

Boat owner financing

Hi, we own a boat that we want to sell to buy a different boat. We have an interested buyer if we provide owner financing. He has proposed 30k down, $1150 monthly payments for 8 years and 20k at the 6 year point; he calculates that this adds up to a 160k offer. I have lots of questions but I guess my first one is, wouldn't we be paying income tax on this amount making it a $112,280 offer? Would the ideal scenario be to do a trade on another boat and get credit for the value of the boat (130k) and eliminate the hassles? Also, one more scenario is that a boat we are interested in buying is offering to do owner financing. Is there a way they could owner finance our boat for this interested guy, instead of us doing it and then lower their price to us by that amount? Info much appreciated!

Liked this question? Tell your friends about it

4 Answers

Order by
Oldest to Newest
Newest to Oldest
Votes

If you get paid $160 K on an installment basis, and your cost basis is $80 K, then you will be paying tax on the capital gain (not on all the payments) and some of that payment money is interest which is current income.

http://www.irs.gov/taxtopics/tc705.html

I didn't calculate the interest on this note because there is so much data missing.  However, on to your question.

Your interest earnings are reportable and taxable.  However, with the exception of home mortgages, interest on loans is NOT deductable.  You may have a depreciation deduction for your loss on the boat, though. 

In any case, considering that we're discussing a six-figure transaction, it may be best to consult a tax attorney to finalize the bargain.

Faith makes us complete thinking entities. Without faith, we do nothing of worth.

I am not know,I'm not familiar with this aspect.

yet I can't help you a lot on this topic but i had a link through which you will not only get a smart advice but you can also get financial help as well as through details of all the related question just visit

Loan Sanction.com or http://www.loansanction.com/

Car Loan, Personal Loan, Home Loan, Bike Loan, Loan against property, and all other types of loan at lowest possible interest rates.

Ask a Question... We'll forward it to people who know

More Questions

Corporate Finance

Corporate finance is a branch of mainstream finance industry that deals with activities associated with running a corporation, business, or a small firm. In technical terms, it is the branch related with long-term and short-term financial goal planning. A few activities involved in this branch ...

What form do you use for owner financing

It varies by state. Some states are Deed of Trust states and some are mortgage states. Get an attorney that specializes in real estate. You will need one anyway to close your sale and record it properly, otherwise you could end up in second or third position on the home. Good Luck. The Private Note ...

Is trade finance useful in business?

Trade finance is definitely a useful mode to channelize business. But the same needs better usage, else it would be a useless one.

Pre shipment finance for my Jetski imports?

Hi, I recently took pre-shipment financing from DBS bank India to import machine parts for my factory from Germany, the entire process was smooth and I recived my shipment much before then I would take without this loan.