Mike Kimball, CPA

Charter Survey        (page 1)

This is the most often-requested consultant/advisory engagement. It is designed to provide you with valuable planning information quickly, and at a reasonable cost.

First, a cumulative projection of cash flows and taxable income is prepared. The projection period encompasses the usual five-year term of a charter boat investment including initial capital contribution to buy the boat, cumulative cash flows from operations, and the estimated equity in the boat at the end of the charter period.  We think it is your best interest to have reasonable financial expectations from the outset and advise all of our clients to review these projections before making a nonrefundable deposit on a boat.

Next, after compiling the projected financial statements we will review your income tax circumstances and objectives to advise you of opportunities that make your boat investment most advantageous.

Relevant circumstances include:

    - Will the boat be held for rental income, or operated as a
           charter business?

    - Will there be joint ownership?

    - What is the boat's area of principal use?

    - Approximately how many days of personal and charter use is
            anticipated each year?

    - Can interest expense be deducted as mortgage interest on a
         second residence? Will alternative minimum tax apply?

    - Do other financing options exist--for example using equity in
            your primary residence to purchase the boat?

    - Can you choose between alternative charter management
             arrangements (i.e. fixed monthly rentals vs. revenue
            sharing) and what are income tax implications?

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