Apricot Tree
Nov 27, 2012, 05:02 PM
Hello there. I recently posted an article about giving away personal property. Here is the case again: a guy is selling his boat, and when they remove the boat from the water he sees that the keel has significant rot and needs to spend some money to fix it, he gets frustrated and gives the title of the boat to the buyer and says it is yours now. The boat has 12k blue book value.
I would like to know how you treat this? In my opinion, a boat is a personal use property which the remaining tax basis is not deductible if the boat is disposed. Disposition includes selling, exchange, trade, etc, and also giving away. So it is a disposition. And there is no tax deductions. It can't be an abandonment, since when you abandon a property, title doesn't change hands.
I would like to know you opinion on this, whether there is a deduction or there is not. A house, a car, or a boat are classified as personal use property and at disposition, you do not deduct losses. Also, is there a casualty involved with the rotten keel? Is this significant in this case?
I would like to know how you treat this? In my opinion, a boat is a personal use property which the remaining tax basis is not deductible if the boat is disposed. Disposition includes selling, exchange, trade, etc, and also giving away. So it is a disposition. And there is no tax deductions. It can't be an abandonment, since when you abandon a property, title doesn't change hands.
I would like to know you opinion on this, whether there is a deduction or there is not. A house, a car, or a boat are classified as personal use property and at disposition, you do not deduct losses. Also, is there a casualty involved with the rotten keel? Is this significant in this case?