# Quick Advice: Donating a boat ride for charity



## TakeFive (Oct 22, 2009)

I've been asked to donate a ride on my boat for 2-4 people for a fundraiser. This will be a silent auction where people bid on various goods and services, to raise money for a student trip to Europe. I need to decide whether to do this by 8 pm tonight, so I don't have time to consult a lawyer. But I thought I'd throw it up here for your ideas around whether I'm being too cautious.

I do not have a six-pack license. My insurance is a recreational policy, which excludes commercial use. People are telling me, "It's OK, you're doing it for charity. Just say you're not taking money from the people, you're providing a free service in exchange for a donation to the charity." But something tells me that the auction listing will say, "Buy a ride on a sailboat." My concern is "if it walks like a duck and quacks like a duck..."

So my feeling is that I can't do this. If someone were hurt, I would be civilly liable and my insurance company would surely decline coverage. I could also be criminally liable as unlicensed boat for hire.

Compounding that, by auctioning this off, I have no control over who the passengers would be. They could be non-swimmers. They could do dumb stuff, like stand up while we're gybing.

That voice in my head tells me I can't do this. Am I being too cautious?


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## bigdogandy (Jun 21, 2008)

I am no attorney, but I have been associated with some not for profits that have done This kind of thing and have always looked for a licensed operation with insurance......


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## jimrafford (Jan 7, 2011)

I have been asked to do the same thing many times and have declined for the same reasons you have stated. The other side of the coin my friends on the other side of our finger do it every year. They own an insurance agency so they should know the risk.
Personally I want control over who gets on my boat.
Jim


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## Uricanejack (Nov 17, 2012)

I would talk to your insurance first. If you can't get an answer in time. It's probably best to let it pass. 
If you are having the doubts you are having its best not to.


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## sailingfool (Apr 17, 2000)

*not legal...*

From the perspective of the USCG, you would be operating as a commercial vessel even though you are not keeping the cash paid for your services. Not a good idea.


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## Donna_F (Nov 7, 2005)

TakeFive said:


> ...
> 
> Compounding that, by auctioning this off, I have no control over who the passengers would be. They could be non-swimmers. They could do dumb stuff, like stand up while we're gybing.
> 
> That voice in my head tells me I can't do this. Am I being too cautious?


You aren't being too cautious in my opinion. An international company I used to work for held a silent auction each year that benefited Easter Seals. Three or four times we offered a week's stay at our beach condo. When we owned it we rented it out for two months in the summer anyway. The last time the person who won the auction, an employee, totally trashed the place. I was shocked as it was a _colleague_. Our cleaning service took photos just so they wouldn't be blamed. The company offered to pay the extra expense that it cost us but we just decided to never offer it again.

Subsequent years I found other ways to help: asking a local wine store to donate a huge basket of stuff, I got permission from the CG to donate a boating safety class for a couple.

You don't know the mindset of the people stepping onto your boat. Anything could happen. Who will cover you should they decide to sue you if they stand up while the boom is moving across the cockpit?

Just my opinion.


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## Scotty C-M (Aug 14, 2013)

I know a fellow who did this: He donated a fancy lunch aboard his boat AT THE DOCK. If he felt that the people were OK, they became friends. As friends they then took off for a day sail. This was completely separate from the donation, and thus (he felt) that his normal insurance, and lack of commercial license, were sufficient. He did this for years.


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## Rapp (Nov 16, 2014)

I've always found that "No good deed goes unpunished" .


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## mstern (May 26, 2002)

I had the idea to donate a day sail on my boat for a fund raiser. I am a lawyer and decided to answer the question you are asking before actually making the donation.

The short answer: you need to be a licensed skipper to do this to be in compliance with maritime law. End of story. However, if you have an accident during the donated sail, the "unlicensed" sail will be the least of your worries. I think it highly unlikely that the CG would prosecute you. As a civil suit defendant, I would be more worried about how it would look to the court and jury determing the amount of damages that you were an unlicensed operator.


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## CalebD (Jan 11, 2008)

I'll also agree that a 6-pack license IS required to make something like this entirely legal.
That said, my boat partner volunteered our boat for a similar charity auction. I forget the price it sold for. Neither of us have the 6-pack license.
Long and short of it, the people who bought the "boat ride" never got their ride, either because they did not contact us or ... It just never happened. 
I think they did not mind the $75 donation to a good cause and just never bothered to redeem their ride. If the cost/donation amount is low enough, many people are just too busy to try to take advantage (not to mention that any "boat ride" would require YOU to be free and have time for it).


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## TakeFive (Oct 22, 2009)

CalebD said:


> I'll also agree that a 6-pack license IS required to make something like this entirely legal.
> That said, my boat partner volunteered our boat for a similar charity auction. I forget the price it sold for. Neither of us have the 6-pack license.
> Long and short of it, the people who bought the "boat ride" never got their ride, either because they did not contact us or ... It just never happened.
> I think they did not mind the $75 donation to a good cause and just never bothered to redeem their ride. If the cost/donation amount is low enough, many people are just too busy to try to take advantage (not to mention that any "boat ride" would require YOU to be free and have time for it).


I'd always go into something like this with the assumption that the winning bidder would "call my bluff." 

Just got back from the meeting, and I was able to tactfully decline. I had some other very good donations to make instead, so they did not need any more from me.


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## FSMike (Jan 15, 2010)

mstern said:


> ----
> I am a lawyer and decided to answer the question you are asking before actually making the donation.
> The short answer: you need to be a licensed skipper to do this to be in compliance with maritime law. End of story. ----


I once got involved in a rather unpleasant internet discussion about this very question. I finally realized that one person was arguing about what the law said, and I was arguing about what the law is.
I do not intend to get involved again beyond this post, but I do wonder:
mstern, do you have any case law to support your viewpoint?
Thanks.


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## Rapp (Nov 16, 2014)

TakeFive said:


> I'd always go into something like this with the assumption that the winning bidder would "call my bluff."
> 
> Just got back from the meeting, and I was able to tactfully decline. I had some other very good donations to make instead, so they did not need any more from me.


I'm kinda surprised you looked for info here after seeing you live in Swathmore,My first barber job was there and there were more Drs and Lawyers than I could imagine,I would have thought one of your neighbors would be a lawyer that could have advised you


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## TakeFive (Oct 22, 2009)

Rapp said:


> I'm kinda surprised you looked for info here after seeing you live in Swathmore,My first barber job was there and there were more Drs and Lawyers than I could imagine,I would have thought one of your neighbors would be a lawyer that could have advised you


When your neighbors are asking you to make a questionable donation, you tend to seek out people who are not your neighbors for impartial advice. Even doctors and lawyers tend to be a lot less careful with others' liability than they are with their own.

Everyone says "it will be fine, what could go wrong?" Obviously they haven't been on a boat to see what can actually go wrong.


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## Rapp (Nov 16, 2014)

TakeFive said:


> When your neighbors are asking you to make a questionable donation, you tend to seek out people who are not your neighbors for impartial advice. Even doctors and lawyers tend to be a lot careful with others' liability than they are with their own.


That makes sense


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## ajoliver (Feb 23, 2007)

People in our Club do this all the time and partly as a result, we have an excellent image in the community. We take out poor kids, minority kids, at risk kids, disabled folks, dying folks wanting to do one last sail, and much, much more. 
And yes, where is the case law? Seriously, where is it? 
If you think hard enough, you can always find a reason not to help make the world a better place. The "law" is just an excuse. 
Just write them a big fat check.


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## Faster (Sep 13, 2005)

I guess we live in a less litigious society.. we've done this annually for the past 10 years without incident or issue. The fundraiser is a silent auction, but a few 'big ticket' items are live bids... our trip is one of them that usually raises between $300-400 for my wife's preschool fundraiser.

We take them out for a sail in the bay, anchor for a late lunch and sail them home by dinner time. It's always been a very pleasant experience with lots of good feedback, and it's one of the most sought after items in the auction every year.


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## Stumble (Feb 2, 2012)

FSMike said:


> I once got involved in a rather unpleasant internet discussion about this very question. I finally realized that one person was arguing about what the law said, and I was arguing about what the law is.
> I do not intend to get involved again beyond this post, but I do wonder:
> mstern, do you have any case law to support your viewpoint?
> Thanks.


Yes, I have plenty of case law on point. Auctioning off time on your boat is treated as commercial operation by the USCG. even if you don't directly benefit from the money.


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## Rapp (Nov 16, 2014)

The Philadelphia area is one of if not the most litigious in the country


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## FSMike (Jan 15, 2010)

Stumble said:


> Yes, I have plenty of case law on point. Auctioning off time on your boat is treated as commercial operation by the USCG. even if you don't directly benefit from the money.


Thank you Greg, but I'm not asking what the USCG thinks.
I am looking for judicial decisions where the court expressly states that donating a boat ride requires a licensed captain.
That's the court, not the USCG.


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## grnrngr (Oct 8, 2014)

That's kinda like saying "I don't care what the cops think, I want to know what the judge says." Coast Guard regulations are not "what the Coast Guard thinks", it is the law. The court will uphold it if necessary. When someone buys a ticket at an auction, that person becomes a paying customer. In order to take a paying customer out on your boat, you must have, at the least, an OUPV license. And the comment "even if you don't directly benefit.." Is somewhat incorrect, because a donation to a charity in addition to usually being a tax write off (a direct benefit), is essentially giving your income for that event to the charity, i.e., even tho you're giving your compensation away, you are still required to comply with the law as regards paying passengers. In the same vein, you can own and drive your own limousine, but if you want to charge for the vehicles services (or donate them to a charity), you'll need a chauffeur's license along with the appropriate insurance.


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## RichH (Jul 10, 2000)

The US national trend for all 'physical participation activities' (skiing, snowboarding, hockey, 'mountain sports', etc.) is the signing of waivers for the release of liability. 
At most US ski areas nowadays you cant buy a lift ticket unless you sign your life away on a required and mandatory 'waiver' form; no signature, no skiing - period. 
In such a litigiously focused society, such is probably prudent for just about 'all' human activity.

Here's a sample of such a waiver of liability form: https://www.rocketlawyer.com/form/release-of-liability.rl 
choose your state, etc. and then hit: 'make a document' to see what is the typical verbiage of an actual waiver form (3 pages !!!!).


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## TakeFive (Oct 22, 2009)

RichH said:


> The US national trend for all 'physical participation activities' (skiing, snowboarding, hockey, 'mountain sports', etc.) is the signing of waivers for the release of liability.
> At most US ski areas nowadays you cant buy a lift ticket unless you sign your life away on a required and mandatory 'waiver' form; no signature, no skiing - period.
> In such a litigiously focused society, such is probably prudent for just about 'all' human activity.
> 
> ...


But if something bad happens, you will still get sued, and the attorney will try to pick apart the waiver (Did the victim have 48 hours to have his attorney review the contract? etc etc...) And if your insurance refuses to cover, claiming it's a commercial activity, you have to hire your own attorney and shoulder the liability yourself.


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## Ajax_MD (Nov 24, 2009)

That's exactly right.

Waivers are all the rage now, but they don't protect you from getting sued. Even if the waiver prevented damages from being awarded, you're still out a lot of money for legal defense.

It's called a "Pyhrric victory".

The only safe way to "make the world a better place" these days, is to write a check. Anything else opens you to a lawsuit or other abuse as illustrated by Donna's example.

I never cease to be shocked and disappointed by the horrid behavior of people that I thought I knew well, and for long periods of time, let alone the behavior of total strangers.

You were right to decline, Rick.


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## pdqaltair (Nov 14, 2008)

I asked the Coast Guard sector (Annapolis) this question a year ago and was told that since the person paid for the "chance," it is a charter, plain and simple.

Licensed operator, commercial insurance, and inspection if required. There is an exception to the inspection requirement if the vessel is not used for charity more than 4x per year and an application is approved for the exception. Their experience has shown that charity charters contain significant risk, when a group of non-boaters crowd on a vessel with an inexperienced operator. I think we have all read of some of the tragedies.


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## mstern (May 26, 2002)

FSMike said:


> Thank you Greg, but I'm not asking what the USCG thinks.
> I am looking for judicial decisions where the court expressly states that donating a boat ride requires a licensed captain.
> That's the court, not the USCG.


Nope. No judicial decisions. Didn't even look. I looked online (CG website) and called the local Sector office. Got the same answer as pdqaltair. That was enough for me. My experience is that absent a very compelling reason and some clearly erroneous logic, courts defer to an agency's interpretation of their own regulations. In fact, case law demands that courts take that approach. I had no interest in fighting that battle.


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## ajoliver (Feb 23, 2007)

Some lawyers are great at keeping you from taking pretty much any action at all. We had one on our board who thought it was his ONLY responsibility was legal CYA. He paralyzed the organization. 
Don't let them run your sailing program, or you'll never get off the dock. 
That being said, be sure you have internal financial controls in place, and that your money people are bonded. Don't ask us how we learned that.


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## travlin-easy (Dec 24, 2010)

FSMike said:


> I once got involved in a rather unpleasant internet discussion about this very question. I finally realized that one person was arguing about what the law said, and I was arguing about what the law is.
> I do not intend to get involved again beyond this post, but I do wonder:
> mstern, do you have any case law to support your viewpoint?
> Thanks.


Mike, many years ago when I was a newspaper reporter for the Washington Post, I covered a similar case at the Customs House in Baltimore. The captain of the boat was found guilty on the basis that he essentially was conveying passengers for hire. In that case, the charity, in essence, hired the boat and its captain was pretty much a sub contractor, therefore, constituting the violation of having an unlicensed, uninsured captain conveying passengers. He was fined $10,000.

Gary


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## nolatom (Jun 29, 2005)

I do recall you can teach sailing, and be paid for it, if the sailboat does not have auxiliary power. This from the ASA web site regarding when a license is required:

http://www.asa.com/pdf/USCG-questions.pdf

This is similar to my recollection of just about every club summer program in Flying Scots or whatever, as long as there's not an outboard (or other "mechanical power") involved.

So I'm wondering why it could not be done on a "pure" sailboat. Your passengers would be paying "indirectly" for their "passage", but how does that differ from your kid's summer camp where the instructors are college kids who get paid?

I teach (and do have a 100T license) and that's how I recall the distinction is made for teaching programs. Now there is a certain tonnage above which even engineless sailing vessels need a licensed captain, but it's well larger than what we are talking about here as I recall.

Please don't make me look it up.....

But, whichever way you slice it, you can't carry more than six paying passengers on any vessel unless it had a Coast Guard Certificate of Inspection. So the sailing schools don't do this, but their boats are small enough that six is plenty anyway.


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## miatapaul (Dec 15, 2006)

Well if it were me, and I really wanted to donate (would take more than a day to organize though) I would find someone with a six pack to donate there time, and call my insurance company and get a one day rider. I doubt it would cost more than a few bucks, but would only be possible if you have a real marine policy, doubt Progressive or other non-marine insurance companies would either know what you were asking for or know what to provide. Sure it will cost you a bit, but could be a fun way to donate some time to a good cause and give someone a taste of sailing. I would not get overly controlling over the people, but would give them a list of rules, like no drugs or alcohol.

But to do it without protecting yourself is asking for trouble. Heck I know some folks I enjoy hanging out with that I would not consider even inviting onto my boat, let alone strangers.


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## Minnewaska (Feb 21, 2010)

I'm not a pro on the USCG, however, it only makes sense that money was paid in exchange for a service. I get the random drawing or bidding or whatever that is different from buying direct. 

The FAA has a carve out for these charitable ops flown by private pilots. Albeit, the carve out is a bit of a PITA to comply with and nearly not worth it. You can fly people entirely for free, such as the young angels or for one of the patient transport organizations. But no money changes hands to anyone, not even the charity.


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## ajoliver (Feb 23, 2007)

In response to the sort or legalism that we see above, many states enacted "Good Samaratin" laws that offer very good protection to unpaid volunteers. 
Hey Travlin - can you provide a link to the "Baltimore Customs House [?]" case? If not, I question it - mere hearsay.


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## miatapaul (Dec 15, 2006)

ajoliver said:


> In response to the sort or legalism that we see above, many states enacted "Good Samaratin" laws that offer very good protection to unpaid volunteers.
> Hey Travlin - can you provide a link to the "Baltimore Customs House [?]" case? If not, I question it - mere hearsay.


But a state "Good Samaritan" law will not trump USCG law. We gave the Coast Guard powers long ago the makes them above any kind of state laws. This is the real crux of the discussion, the USCG rules.


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## ianjoub (Aug 3, 2014)

As was said earlier: No good deed goes unpunished.


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## travlin-easy (Dec 24, 2010)

ajoliver said:


> In response to the sort or legalism that we see above, many states enacted "Good Samaratin" laws that offer very good protection to unpaid volunteers.
> Hey Travlin - can you provide a link to the "Baltimore Customs House [?]" case? If not, I question it - mere hearsay.


I don't really give a damned if you believe it or not. It was more than 20 years ago - look it up yourself.

Gary


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## nolatom (Jun 29, 2005)

I think good deeds generally do go unpunished, it just doesn't make the news ;-)

But that's a larger question than the one asked. The license requirement apparently does not apply to smaller sailboats without any mechanical propulsion. The sailing school websites all echo this, requiring their instructors to be licensed if on an auxiliary sailboat, but not on the smaller (generally under say 20') ones with no inboard or outboard power.

That said, I would make sure in advance that my insurance would cover it anyway. And if possible, I'd hire someone with a license (me!!! ha ha) just to be safe.


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## hellosailor (Apr 11, 2006)

Five, it is hard _not _to be paranoid these days.

I'd email the insurance company (or record a call) to ask them if you are covered in this situation. If they say yes...

#2, same thing with the USCG district HQ, not just a local station. Ask them if you need any license to do this. If they say you're OK...

Tell the charity yes, but you'll require a "hold harmless" agreement from them, stating that they will be fully responsible for any liabilities that arise including consequential damages, etc. That's some work but if it all checks out, something you can offer annually so the benefit is more than just a one-shot.

These days, there are too many professional "**********" out there, looking for ways to make life complicated.


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## ianjoub (Aug 3, 2014)

Why not find a local charter company that does this for a living and stroke them a check for your donation?


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## nolatom (Jun 29, 2005)

ianjoub said:


> Why not find a local charter company that does this for a living and stroke them a check for your donation?


Now you're getting too practical, we were having fun debating what's legal ;-)

the outfit I teach for part-time has been willing, when asked (sometimes by me) about a worthy charitable cause, to donate a charter/lesson with a licensed captain (me) who donates his services. We are both happy to do it, and they get a deduction.


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## Minnewaska (Feb 21, 2010)

ajoliver said:


> ....many states enacted "Good Samaratin" laws that offer very good protection to unpaid volunteers......


Not exactly. Most of these laws protect one from attempting to help in moment of crisis and causing unintended damages. Such as performing CPR, but breaking their ribs doing compressions.

Willfully offering services that required a license would never be covered. You'd be skewered.


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## Minnewaska (Feb 21, 2010)

hellosailor said:


> ......Tell the charity yes, but you'll require a "hold harmless" agreement from them, stating that they will be fully responsible for any liabilities that arise including consequential damages, etc......


First, you will still be the defendant and then likely have to incur the cost to adjudicate the hold harmless to collect.

Second, it's not terribly likely that a charity has sufficient assets to make good on one.


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## ajoliver (Feb 23, 2007)

And a note on the Coasties. Many of them are young people far from home - who on occasion risk their lives for the likes of us. Many of them know surprisingly little about sailing - but would love to learn. Drop by the your USCG Station and say hello. Invite them out for a sail. 
BUT WAIT! WHAT WOULD YOUR ATTORNEY SAY?


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## Minnewaska (Feb 21, 2010)

ajoliver said:


> .....
> BUT WAIT! WHAT WOULD YOUR ATTORNEY SAY?


They would say, knock yourself out. No money is changing hands.


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## TakeFive (Oct 22, 2009)

nolatom said:


> Now you're getting too practical, we were having fun debating what's legal ;-)
> 
> the outfit I teach for part-time has been willing...to donate a charter/lesson ...and they get a deduction.


OK, while we're debating legalities, let's talk about taxes. Exactly what kind of "deduction" does this business get? Ordinarily they would generate cashflow from these services, but when they donate them, they get no cashflow and no profit. So in this transaction, there is nothing to deduct against. Taking a further deduction for services provided for free is double-counting, IMO.

Same goes for you. If you reported income for your time on this outing, you could deduct it and net it to zero. But since you donated your time, you nothing to deduct against. (Obviously you could deduct your mileage and other real expenses incurred in providing the free service, but only if the charity is registered 501c(3).) But beyond that, if you donate your time AND attempt to take a further deduction, you are double-counting. You'll get away with it...until you get audited.

I hear people discussing this scheme all the time, and I believe that they're skirting the law.


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## Minnewaska (Feb 21, 2010)

If a charter business did this, they have no income to claim and they simply deduct whatever actual expenses they incur. Is anyone dumb enough to put down the amount of revenue they didn't get as a deduction? There isn't even a line for that. The contribution line requires receipts from charities.


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## drsutton (Aug 6, 2013)

My homeowners insurance extends to my boat with the same coverage. What makes a boat any different?


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## Minnewaska (Feb 21, 2010)

drsutton said:


> My homeowners insurance extends to my boat with the same coverage. What makes a boat any different?


Exactly which coverage? Liability, environmental? Most liability policies will decline coverage, if you broke the law.

What boat do you have? Most can not be attached to a homeowners policy.


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## Donna_F (Nov 7, 2005)

Minnewaska said:


> If a charter business did this, they have no income to claim and they simply deduct whatever actual expenses they incur. Is anyone dumb enough to put down the amount of revenue they didn't get as a deduction? There isn't even a line for that. The contribution line requires receipts from charities.


When I donated our condo I received a receipt from the Easter Seals for the amount that I told them the contribution was worth. I used the amount that we'd have charged if we rented it out for that week.


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## Minnewaska (Feb 21, 2010)

DRFerron said:


> When I donated our condo I received a receipt from the Easter Seals for the amount that I told them the contribution was worth. I used the amount that we'd have charged if we rented it out for that week.


Yikes. Total no, no.


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## boz86 (May 17, 2012)

Minnewaska said:


> Yikes. Total no, no.


Would you mind explaining why?

I know the U.S. IRS changed the rules on donations of vehicles, clothes, etc, be interested in knowing what they allow to be deducted on donated rentals. Market value appears like a fair enough starting place as that's the end result of the other changes.


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## travlin-easy (Dec 24, 2010)

In most instances, you, or your business, can legally deduct actual expenses when donating to various non-profit charities. 

For many years, when I was a full-time, freelance writer and writing several boating and fishing columns every week and month, I was able to deduct my actual boat expenses, which was considerable. The boat was considered a capital expenditure and depreciated, just the same as I depreciate my van now for my music business. The actual cost of operating that vessel, which was used to develop my income, was legally deductible, just the same as any commercial fishing vessel. And, there are specific laws on the books that pertain to this that must be followed to the letter of the law. Just like a home office deduction, which I have used for more than 45 years.

So, if Donna's condo provides her with an income on a regular basis, and it falls into the correct category, those expenses are fully deductible, as is a percentage of the normal revenue it would generate. Rental incomes, however, fall into a category that I'm not competent in. That's a different world than that of being a sole proprietor business owner, which is the category I fall into. Taxes are just too damned complicated. 

Good luck,

Gary


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## ianjoub (Aug 3, 2014)

boz86 said:


> Would you mind explaining why?
> 
> I know the U.S. IRS changed the rules on donations of vehicles, clothes, etc, be interested in knowing what they allow to be deducted on donated rentals. Market value appears like a fair enough starting place as that's the end result of the other changes.


You aren't supposed to know why. Hell, you aren't allowed to know why. The tax code is written so nobody knows why. This is how 'they' screw you when they feel it is appropriate. 'You' are supposed to know and understand 50,000 (or more) pages of tax code of face fines and imprisonment....

What a fine country we live in


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## Stumble (Feb 2, 2012)

ianjoub said:


> You aren't supposed to know why. Hell, you aren't allowed to know why. The tax code is written so nobody knows why. This is how 'they' screw you when they feel it is appropriate. 'You' are supposed to know and understand 50,000 (or more) pages of tax code of face fines and imprisonment....
> 
> What a fine country we live in


The reason why is because the person who actually paid out the money is granted the tax donation. otherwise both the person out the money and the person who donated the use of the property would get a deduction for the same transaction. The IRS tends to look poorly on such double donations.


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## TakeFive (Oct 22, 2009)

Stumble said:


> The reason why is because the person who actually paid out the money is granted the tax donation.


Probably not. Donations to charity are only deductible if you received nothing in return for the money. If your received a token gift that's much less than the donation (say a $15 DVD for a $100 donation to PBS), you can only deduct the difference ($85). IRS is very explicit about this, and most charities will supply a receipt that says no goods/services were provided and/or what the value of token gifts were.



DRFerron said:


> When I donated our condo I received a receipt from the Easter Seals for the amount that I told them the contribution was worth. I used the amount that we'd have charged if we rented it out for that week.


Donna,

If you donated your condo for a week, you could deduct actual expenses that you had to pay out of pocket - utilities, trash, maid service, probably mortgage - all those things that would have reduced your bottom-line profit had you received rent. But your failure to collect rent (cash flow) is its own deduction - you can't deduct the rent in addition to not collecting it.

If you rented someone else's condo and donated the week to a 501c(3) registered charity, then you could deduct what you paid for rent, because it's actual cash out of your pocket.

So as a rule, it's only an allowable deduction if it's actual cash out of your pocket. If you would collect rent (profit) but didn't, then it is self-deducting already.


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## TakeFive (Oct 22, 2009)

Minnewaska said:


> ...Is anyone dumb enough to put down the amount of revenue they didn't get as a deduction?


I hear about this ALL THE TIME. I just shake my head. I'm willing to argue this on a message board, but not face-to-face with friends.

Here's a good one: About 20 years ago when my daughter was selling Girl Scout cookies, one of our neighbors insisted on paying by check every year. Without us asking, she said it was SO SHE COULD TAKE A TAX DEDUCTION FOR IT. Just dumb.


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## Stumble (Feb 2, 2012)

nolatom said:


> I think good deeds generally do go unpunished, it just doesn't make the news ;-)
> 
> But that's a larger question than the one asked. The license requirement apparently does not apply to smaller sailboats without any mechanical propulsion. The sailing school websites all echo this, requiring their instructors to be licensed if on an auxiliary sailboat, but not on the smaller (generally under say 20') ones with no inboard or outboard power.
> 
> That said, I would make sure in advance that my insurance would cover it anyway. And if possible, I'd hire someone with a license (me!!! ha ha) just to be safe.


They i ole answer is that you only need a USCG License if you answer yes to the following...

1) is the instructor being compensated in any way 
2) does the vessel have auxilary power
3) are you operating on waters under the control of the USCG

If you answer yes to all three you need a license. The more complicated answer is that you are allowed a small engine (up to 9hp I think but would need to check), and you don't need a 6-pac. There is a special easier to get license for boats instructors, but I don't know the requirements. We looked at getting them for the yacht clubs instructors, but they all qualified for a tonnage license so didn't persue it.


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## Minnewaska (Feb 21, 2010)

boz86 said:


> Would you mind explaining why?
> 
> I know the U.S. IRS changed the rules on donations of vehicles, clothes, etc, be interested in knowing what they allow to be deducted on donated rentals. Market value appears like a fair enough starting place as that's the end result of the other changes.


Because you can't deduct something you didn't pay. Your foregone rental income is, by definition, not in your taxable income, therefore nothing to deduct against. To make this worse, the donated period of time is considered personal use of the property, when determining max use.

Best to go talk to your tax professional.


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## Donna_F (Nov 7, 2005)

Minnewaska said:


> If a charter business did this, they have no income to claim and they simply deduct whatever actual expenses they incur. Is anyone dumb enough to put down the amount of revenue they didn't get as a deduction? There isn't even a line for that. The contribution line requires receipts from charities.


You mentioned getting a receipt from the charity. I replied that I got a receipt from the charity. That's it. They asked the value, I told them the cost of the rental (easily verifiable from the online listing), they mailed me a receipt. I'm sorry if I misinterpreted what you meant. I didn't think what I did or did not deduct was relevant.


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## magicmoments (Jan 15, 2009)

Just another point beyond the liability aspect. I donated a "sunset cruise " to a local non profit. 3 years later the winners have not been able to agree between themselves on a date. So if you do, set a firm date and maybe a rain date and if not used then all is off. 

Just my 2cents


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## caberg (Jul 26, 2012)

DRFerron said:


> You mentioned getting a receipt from the charity. I replied that I got a receipt from the charity. That's it. They asked the value, I told them the cost of the rental (easily verifiable from the online listing), they mailed me a receipt. I'm sorry if I misinterpreted what you meant. I didn't think what I did or did not deduct was relevant.


What is the purpose of getting a receipt for the value of a 1 week rental unless you are planning to take a deduction for the value of the 1 week rental?

Anyway, totally not allowed.

Example 2.
Mandy White owns a vacation home at the beach that she sometimes rents to others. For a fundraising auction at her church, she donated the right to use the vacation home for 1 week. At the auction, the church received and accepted a bid from Lauren Green equal to the fair rental value of the home for 1 week. Mandy cannot claim a deduction because of the partial interest rule. Lauren cannot claim a deduction either, because she received a benefit equal to the amount of her payment.

http://www.irs.gov/pub/irs-pdf/p526.pdf at page 10.

P.S. -- Don't believe anything you read on an internet forum. Talk to an accountant.


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## Donna_F (Nov 7, 2005)

caberg said:


> What is the purpose of getting a receipt for the value of a 1 week rental unless you are planning to take a deduction for the value of the 1 week rental?
> 
> Anyway, totally not allowed.
> ...


Uncle.

I'm sorry I brought up the receipt. I didn't realize everyone would jump to conclusions about what I did with it.


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## sailingfool (Apr 17, 2000)

Stumble said:


> They i ole answer is that you only need a USCG License if you answer yes to the following...
> 
> 1) is the instructor being compensated in any way
> 2) does the vessel have auxilary power
> ...


I think you state item 1 incorrectly. Relevant regs actually posit that if anything of value is provided in return, that value does not need to be in the form of money to the instructor, the guests payment to the charity makes them commercial customers.

I believe what you have in mind as the less onerous license is the launch operator license, still a license with per-requisites and tests to obtain.

As to the potential seriousness of operating a vessel in a commercial manner without a license, consider this:
Coast Guard, Illinois officials crack down on illegal charter boats - Professional Mariner - Web Exclusive 2012


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## nolatom (Jun 29, 2005)

The Professional Mariner article highlights local situations where unlicensed operators are getting ratted out by the licensed ones, and in the Chicago inner harbor, that would mean motor-propelled, you can't sail all those bridges sans engine and the motor tour boats are low-profile to pass under them.

Occasionally down here they get after unlicensed swamp tours, on those bayous that are federal waters. Landlocked swamp tours are state-regulated only. 

I'm not aware of a minimum/maximum horsepower requirement on the federal side. I thought any "mechanically propelled" vessel carrying pax for hire needs a licensed captain, while not so for motorless sailboats. 

It seems this has also become a taxation thread, which interests me less but is relevant to the topic. I am a stringer not an employee on my teaching and charter gigs, so I leave the deduction question to the owner and their accountant. I have not taken a deduction for throwing in my captaining, so I guess I'll keep on not doing it now that I have learned all this good stuff.


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## MastUndSchotbruch (Nov 26, 2010)

TakeFive said:


> Donna,
> 
> If you donated your condo for a week, you could deduct actual expenses that you had to pay out of pocket - utilities, trash, maid service, probably mortgage - all those things that would have reduced your bottom-line profit had you received rent. But your failure to collect rent (cash flow) is its own deduction - you can't deduct the rent in addition to not collecting it.
> 
> ...


So, let's see. The situation Donna describes is

-- Donor gives money to Charity
-- Condo owner makes available condo
-- Donor uses it
-- Nobody get a tax deduction

Instead, what they SHOULD have done (in the interest of tax avoidance) is to formally reverse the order of things:

--Donor uses condo
--Donor gives money to Condo owner
--Condo owner donates money to Charity
--Condo owner collects tax deduction

Looks like everybody is getting exactly the same in the two situations (Charity gets money, Donor gets use of condo), but in the first case there is no tax deduction and in the second there is.

Is this correct?


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## TakeFive (Oct 22, 2009)

MastUndSchotbruch said:


> So, let's see. The situation Donna describes is
> 
> -- Donor gives money to Charity
> -- Condo owner makes available condo
> ...


There is not any benefit to doing the second, since the income gets reported and then deducted, creating a wash (at best). In fact, the second one could lead to greater tax liability, depending on how the condo owner has her business set up. Of the business is set up sloppily, the reported income might be subject to self-employment taxes, for which there is no deduction. If the owner is subject to alternative minimum tax, the effective deduction may be less than 100% after AMT is calculated.

In my non-expert opinion, the owner is much better off donating the condo in a cashless transaction.

My free internet advice is worth what you pay for it - maybe less. Consult a tax professional if you need real advice.


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## hellosailor (Apr 11, 2006)

Being a "donor" doesn't make someone a "volunteer" much less a "good Samaritan" and state and federal laws vary highly for all of that.

If a US citizen makes a contribution to a charitable organization, last time I checked the IRS allowed a deduction only for the value of the donation _less any goods given back. _ So if you gave $150 to PBS and they sent you a five-DVD set of something, you can't (legally) deduct the whole $150, you subtract the value of the DVDs (which could be $75) and you're left with only a $75 charitable donation.

It really isn't difficult or illogical and the IRS has publications (print, fax, web) that make this all very clear.

When it comes to big ticket items like vehicles, well, duh? "Donate it and write it off" became such a HUGE widespread joke that it wasn't surprising that the IRS plugged that loophole. You donate your Rolls to a charity, they sell it a couple of weeks or months later for $1500, that's the market value it sold for and that's all you get. And you don't get it until it has sold. Since some things aren't just resold, if the charity is nice to you and USES the Rolls for two years, before selling it, you get to take the book value or similar valuation, you don't have to wait for the sale.

Donor "buys" a boat ride at auction? There may be no deduction to be had, since they are getting the value of a boat ride! Unless they bid it up and perhaps donate two grand for your one hour dinner tour in the SS Minnow.

OTOH, the boat owner, who is donating their vessel and services, _has _a valid donation. Regardless of the sequence, because they've _donated _something and gotten nothing in return.

Except the worries about liability exposure, commerce issues, and karma.

Dinner guest is loaded, has brought more booze, falls overboard at night...Oh yeah, private recreational vessel insurance is going to be happy to pay that one. Some legalese and a "hold harmless" up front really ought to help with that. At least somewhat.


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## Donna_F (Nov 7, 2005)

MastUndSchotbruch said:


> So, let's see. The situation Donna describes is
> 
> -- Donor gives money to Charity
> -- Condo owner makes available condo
> ...


No. The auction winner did not give me any money. It went straight to the coordinators in my company who turned it over to Easter Seals. When I was told that they received the money I gave the winner the keys a few days before they were due to take their week.


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## Donna_F (Nov 7, 2005)

I now see where I screwed up in this mess. When I said I "used" the amount I would have charged I did NOT mean that I deducted that amount on my taxes. I meant that when they asked me "what would you have charged for the week" to give me a receipt, I told them how much I would have charged for that week because that's what they asked me. Absolutely nothing to do with any deductions.


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## ajoliver (Feb 23, 2007)

Pretty sure (but too lazy to check) that the feds allow volunteers to deduct certain reasonable expenses that they incurr while volunteering - including things like mileage, boat fuel, etc..


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## Donna_F (Nov 7, 2005)

ajoliver said:


> Pretty sure (but too lazy to check) that the feds allow volunteers to deduct certain reasonable expenses that they incurr while volunteering - including things like mileage, boat fuel, etc..


It depends. In the CG auxiliary we get reimbursed directly for fuel, lunch, certain other things while on patrol. Uniforms, some equipment, mileage, stuff like that are not reimbursed but we can list on our taxes.


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## Rapp (Nov 16, 2014)

Well I've gained much knowlege in my short time on this forum,but no disrespect to anyone,,I certainly won't be looking on here for tax advice in the coming months.


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## MastUndSchotbruch (Nov 26, 2010)

TakeFive said:


> There is not any benefit to doing the second, since the income gets reported and then deducted, creating a wash (at best).


Of course!! [sound-of-hand-slapping-forehead]

Shouldn't post before first cup of coffee


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## FSMike (Jan 15, 2010)

travlineasy said:


> Mike, many years ago when I was a newspaper reporter for the Washington Post, I covered a similar case at the Customs House in Baltimore. The captain of the boat was found guilty on the basis that he essentially was conveying passengers for hire. In that case, the charity, in essence, hired the boat and its captain was pretty much a sub contractor, therefore, constituting the violation of having an unlicensed, uninsured captain conveying passengers. He was fined $10,000.
> Gary


Gary, thank you.
I have been involved in this discussion on two different occasions involving many argumentative posts, and you are the first person to actually profess to have knowledge of a judicial decision concerning this subject.

I am not sure that it is directly on point due to the language regarding the "captain" being "a sub contractor" and "essentially --- conveying passengers for hire".
I think it would be a stretch for the court to declare somebody who donates a boat ride to be a sub contractor, although we all know courts can indeed stretch. It sounds to me as if that case might have involved a continuing enterprise, rather than a one off donation.

I realize it was a long time ago, but it's a shame you don't have the citation foremost in your mind at all times lol.
Every time I have previously asked somebody for a judicial precedent on point, they mysteriously become silent. Thanks for your knowledge.

And for that poster who declared that the courts cannot change the USCG "law", you, sir, win the naivete prize.


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## rgscpat (Aug 1, 2010)

Remember the Heart of Sailing tragedy and deaths in San Diego? Ten people on a water-ballasted MacGregor 26, as I recall. 
The charity seemed to be trying to skirt the law with their "sailing by donation" scheme. 
Whatever happened legally in the aftermath?
Charity Blames Wind Gust For Fatal San Diego Boat Accident - 10News.com KGTV ABC10 San Diego

The legal case seems to have wound down in the San Diego Superior Court in February 2014 after some possible form of "compromise of claim" with MacGregor Yachts, but it was just a civil lawsuit Olds (Casey Gerry for the Chens, etc.) vs. MacGregor, Heart of Sailing, George Saidah, etc., case 37-2011-00098554-CU-PO-CTL, and I don't know if there was any discussion of USCG carriage for hire in the court case, which may perhaps have focused more on overloading and warnings.


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## rgscpat (Aug 1, 2010)

Oh, and I'm not sure a motor matters really for discussions of "carriage for hire". 
And some jurisdictions might define a motor-less sailboat as nonetheless being "mechanically propelled" or as containing "mechanical apparatus"... the law may be weird and non-obvious about this sort of thing.


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## travlin-easy (Dec 24, 2010)

I covered many, many USCG cases back then, several of which involved unlicensed, uninsured boats where captains were charged with taking passengers out fishing near the mouth of Chester River. In many of those cases the captain was cited for carrying passengers for hire while not being licensed. Several claimed no one was charged anything, but they donated money to the captain to cover fuel costs. All were found guilty. 

I wrote those articles in Charter Industry Trade News, a publication that at the time was published out of Stuart, Florida and owned by captain Paul McElroy. It was an international publication that I freelanced for more than a decade. My columns, Fishlines and some special features, also appeared in the Weekend Section of the Washington Post every week for 16 years. I also wrote boating specials for the Baltimore Sunpapers, York Dispatch, and more than 20 national magazines. Sure glad I no longer have to cover that beat and meet those grueling deadlines nearly every day of the week.

Cheers,

Gary


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## nolatom (Jun 29, 2005)

rgscpat said:


> Oh, and I'm not sure a motor matters really for discussions of "carriage for hire".
> And some jurisdictions might define a motor-less sailboat as nonetheless being "mechanically propelled" or as containing "mechanical apparatus"... the law may be weird and non-obvious about this sort of thing.


It apparently does, though, make a difference in whether a licensed captain is required on a motorless sailboat, even if the passengers (must be six or fewer) are "carried for hire". Hence the sailing schools who staff accordingly.

The Coast Guard does not consider sail to be "mechanical propulsion" and I don't know who all else would...


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## nolatom (Jun 29, 2005)

travlineasy said:


> I covered many, many USCG cases back then, several of which involved unlicensed, uninsured boats where captains were charged with taking passengers out fishing near the mouth of Chester River. In many of those cases the captain was cited for carrying passengers for hire while not being licensed. Several claimed no one was charged anything, but they donated money to the captain to cover fuel costs. All were found guilty.
> 
> I wrote those articles in Charter Industry Trade News, a publication that at the time was published out of Stuart, Florida and owned by captain Paul McElroy. It was an international publication that I freelanced for more than a decade. My columns, Fishlines and some special features, also appeared in the Weekend Section of the Washington Post every week for 16 years. I also wrote boating specials for the Baltimore Sunpapers, York Dispatch, and more than 20 national magazines. Sure glad I no longer have to cover that beat and meet those grueling deadlines nearly every day of the week.
> 
> ...


Gary, this question used to come up a lot, so the Coast Guard changed the law to make clear that *voluntary* sharing of expenses of a voyage (gas, ice, food, legitimate out of pocket stuff, no profit motive) does not constitute carriage for hire. Handy blurb here which I googled:

BoatSafe.com

The case you describe sounds as though it was more "payment" than sharing expenses. Also the difference between a charter operator (unlicensed) and a bunch of friends sharing expenses.


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## miatapaul (Dec 15, 2006)

FSMike said:


> Gary, thank you.
> 
> Every time I have previously asked somebody for a judicial precedent on point, they mysteriously become silent. Thanks for your knowledge.
> 
> And for that poster who declared that the courts cannot change the USCG "law", you, sir, win the naivete prize.


Thing is do you want to be the one who has to pay for the USCG law to be changed? Your talking thousands if not hundreds of thousands of dollars to defend your position. As it would be appealed to a court that can make a "change." I think those who have said they contacted USCG offices is more than sufficient to determine my actions as I am not going to be the one to foot the legal bill just so I can donate a three hour cruise. And given the past cases it is highly unlikely that you are going to convince the court to change what has been the law of the land for a long time.


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## travlin-easy (Dec 24, 2010)

Rapp said:


> Well I've gained much knowlege in my short time on this forum,but no disrespect to anyone,,I certainly won't be looking on here for tax advice in the coming months.


Looking for tax advice here would be akin to going to McDonalds for a filet mignon. 

Gary


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## travlin-easy (Dec 24, 2010)

Tom, back then these were done on a case by case basis, and from what I read on that thread, this is still the case. The ones I covered were pretty much cut and dry. Those captains were individuals that had lost their licenses for one reason or another, and figured this would be a good way to circumvent the law. They were wrong! I had the honor and privilege to ride along with the USCG on those sting operations and in all but one of the boats busted, the vessels were in deplorable condition and could not pass the standard safety inspection. They were old workboats that had been converted for headboat operation and ran out of Kent Narrows on a daily basis to bottom fish for perch, croaker and spot. One of the boats decks were completely rotted out in the center, and the captain kept the engine running the entire time because the bilge had a crossover valve to the engine's raw water intake pump. Essentially, the engine was cooled by the water leaking into the bilge, then pumped through the engine and out the exhaust. We followed the boat back to the dock and the captain jumped from the boat and quickly placed a sump pump in the bilge to prevent the boat from sinking. I was amazed.

In just about every case, there was the excuse that the passengers were not paying the captain's salary, but instead they were just helping to defray the cost of running the boat. It was an interesting time in my life, and I got to cover a lot of diverse cases for the various publications that assigned them to me. 

One particular case I covered, which some of you may remember, was the sinking of the El-Toro, a headboat out of Reedville, VA. It went out on a nasty day in December of that year, a day when air temperatures were about 50, water temperature was about 50 and winds were gusting to the mid 40s from the northwest. The old wooden boat blew a board, sank to the gunwales, then sat awash off Smith Point Light for the next three hours. During that short period of time, if I recall correctly, of the 50 passengers aboard, 5 died from exposure to the elements. While the USCG absolved the captain from charges of negligence, I believe he was later sued in civil court and heavily fined.

Gary


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## hellosailor (Apr 11, 2006)

"the feds allow volunteers to deduct certain reasonable expenses"
Call the IRS toll-free and they'll give you the list. Charitable deduction for car mileage is 14c per mile, _way _less than business or medical use of a car. Trying to deduct a thin slice of your dockage, boat loan, and sail depreciation might be allowed, but I'd bet it would make a fine red flag for getting audited.

And everyone knows that if you want a fine fillet, you don't go to McDonald's, unless it is to ask them where the nearest Outback is. (No, that ain't a truly fine piece of beef either.(G)

"so the Coast Guard changed the law to make clear that *voluntary* sharing of expenses of a voyage " No, last time I heard it, Congress was the only party authorized to "make" or "change" laws. The USCG simply makes formal statements as to how they plan to enforce and interpret the laws. And sometimes recommends to Congress that the laws be changed.

Similarly the courts don't make any laws in the US. We learned that in middle school, three branches so they can each say the other guy did it. The courts can say "that law is xxxx and must be voided and unenforceable" and do fine things like that, but the courts don't MAKE any laws. They do set precedent for interpreting the poorly written (unclear) ones, and the precedent can bind other cases in the future, but that's still just what is called "case law" which is not "laws".

Kinda like the different departments in DC telling various states they can allow pot sales...and telling the banks they can't touch any part of that business. The only important question is, whether the men with hats and guns are gonna bust you for it.


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## Minnesail (Feb 19, 2013)

Rapp said:


> Well I've gained much knowlege in my short time on this forum,but no disrespect to anyone,,I certainly won't be looking on here for tax advice in the coming months.





travlineasy said:


> Looking for tax advice here would be akin to going to McDonalds for a filet mignon.


Or going to Olive Garden because you wish you were in Italy.


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## nolatom (Jun 29, 2005)

hellosailor said:


> "the feds allow volunteers to deduct certain reasonable expenses"
> Call the IRS toll-free and they'll give you the list. Charitable deduction for car mileage is 14c per mile, _way _less than business or medical use of a car. Trying to deduct a thin slice of your dockage, boat loan, and sail depreciation might be allowed, but I'd bet it would make a fine red flag for getting audited.
> 
> And everyone knows that if you want a fine fillet, you don't go to McDonald's, unless it is to ask them where the nearest Outback is. (No, that ain't a truly fine piece of beef either.(G)
> ...


I don't disagree, but just for the sake of clarity, I should have said "Congress, when they revised Title 46 of the U.S. Code, changed the law at the Coast Guard's request to (what you see in the blurb I posted, where it says it is "amended" to add that explanation. So it's not just an explanation by an administrative agency, it's a Congressional amendment to their own statute, that 'three branches' thing, well, two branches..

Full disclosure once again, I'm retired USCGR, active then Reserve, used to be in Marine Inspection and Investigation, so I may lean toward making them sound more logical than they may appear to the average bear.


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## CLucas (Feb 10, 2007)

Feels like we made this about 100x more complicated than it ever needed to be. I've done this several times, but positioned as you donate $xxx to the church/school and you and a friend come out for a daysail _as my guests_ aboard Grey Goose for an afternoon of sailing following by lunch or dinner on the mooring. I give them the same orientation on the boat that I give any non-sailing guest and reserve the right to reschedule or cancel with no advance notice if the conditions aren't suitable.

If you take a guest out for a sail and they get clobbered by the boom or lose a finger in a winch (to be more graphic) -- they will more than likely go through their insurance company, who may contact your insurance company and settle the claim. That's why you have insurance. The end.

Everyone should make a point of getting more non-sailors out on the water. It's good for the sport, you'll feel good about it and you'll make their day. Be safe, educate them and give them an experience to remember.


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## Rapp (Nov 16, 2014)

CLucas said:


> Feels like we made this about 100x more complicated than it ever needed to be. I've done this several times, but positioned as you donate $xxx to the church/school and you and a friend come out for a daysail _as my guests_ aboard Grey Goose for an afternoon of sailing following by lunch or dinner on the mooring. I give them the same orientation on the boat that I give any non-sailing guest and reserve the right to reschedule or cancel with no advance notice if the conditions aren't suitable.
> 
> If you take a guest out for a sail and they get clobbered by the boom or lose a finger in a winch (to be more graphic) -- they will more than likely go through their insurance company, who may contact your insurance company and settle the claim. That's why you have insurance. The end.
> 
> Everyone should make a point of getting more non-sailors out on the water. It's good for the sport, you'll feel good about it and you'll make their day. Be safe, educate them and give them an experience to remember.


I believe your thinking is flawed,there's a huge difference between a guest on your boat and a winner of an auction at a charity event.A guest would fall under recreation ins guidelines and also Coast Guard regs,a contest winner would be someone who paid or donated a fee making it commercial.Also a "Guest would usually be someone you have a relationship with, ie less willing to sue.Bottom line to me-Why risk it ? I feel he made an intelligent decision


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## sailingfool (Apr 17, 2000)

CLucas said:


> Feels like we made this about 100x more complicated than it ever needed to be. I've done this several times, but positioned as you donate $xxx to the church/school and you and a friend come out for a daysail _as my guests_ aboard Grey Goose for an afternoon of sailing following by lunch or dinner on the mooring. I give them the same orientation on the boat that I give any non-sailing guest and reserve the right to reschedule or cancel with no advance notice if the conditions aren't suitable.
> 
> If you take a guest out for a sail and they get clobbered by the boom or lose a finger in a winch (to be more graphic) -- they will more than likely go through their insurance company, who may contact your insurance company and settle the claim. That's why you have insurance. The end.
> 
> Everyone should make a point of getting more non-sailors out on the water. It's good for the sport, you'll feel good about it and you'll make their day. Be safe, educate them and give them an experience to remember.


I dont think the issue itself is complicated, what is complicated are the the nasty circumstances and risks someone faces from not appreciating how simple and clear the issue is. Offering use of your vessel to raise funds for a charity is a form of commercial use that exposes you to all the risks you'd face if you hung up a shingle on the boom and started collecting $100 a head.

Should there be an accident injuring a guest, if the guest or guest's lawyer picks up on the fact you were operating the vessel in violation of state and federal law (a crystal clear fact, not an opinion), then it is not "the end", its the beginning, and right there you are likely up the creek without a paddle. I'd worry one would likely have a problem with coverage from your vessel insurance, maybe even from your personal liability insurance, although I'm not re-reading those again just for this post.


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## FSMike (Jan 15, 2010)

Ah well, this is where I came in.
All I did was ask for judicial precedent on point in this matter, and no one seems able to supply one. (Gary, thanks for your input.)
I'll go away now.


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## TakeFive (Oct 22, 2009)

rgscpat said:


> Remember the Heart of Sailing tragedy and deaths in San Diego? Ten people on a water-ballasted MacGregor 26, as I recall.
> The charity seemed to be trying to skirt the law with their "sailing by donation" scheme.
> Whatever happened legally in the aftermath?
> Charity Blames Wind Gust For Fatal San Diego Boat Accident - 10News.com KGTV ABC10 San Diego
> ...


More to the point, once you have the plaintiff's law firm issuing a press release, it's a sure thing that EVERYONE LOSES.


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## capt jgwinks (Sep 24, 2013)

I hold a USCG 200 ton Master ticket and have done this in the past, however, even though I'm licensed, my personal boat is not. Here in Michigan, the DNR inspects all "uninspected vessels", even though, or probably because, the Coast Guard does not. If you are in a state where six pack boats don't get inspected, you still have to comply with CFR subtitle C equipment requirements which is much more stringent than what is required on pleasure boats. My personal boat is not inspected or certified as a charter boat by the state, so I cannot legally donate a cruise.


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## sailingfool (Apr 17, 2000)

capt jgwinks said:


> ... Here in Michigan, the DNR inspects all "uninspected vessels", even though, or probably because, the Coast Guard does not. ..


Thats an interesting wrinkle I've seen before. Do you have any doc or reference as to the scope of a MI state inspection, that might an interesting read. They can't just apply the USCG inspected vessel standards, or few pleasure boats could pass.


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## capt jgwinks (Sep 24, 2013)

I hold a USCG 200 ton Master license and run passenger vessels for a living. Even though I am licensed, my personal boat is not. Here in Michigan, the DNR inspects and certifies all "uninspected vessels", even though, or more propably because, the USCG does not. Even if your in a state that does not inspect charter boats, you mstill need to comply with CFR 41 subchapter C equipment requirements, which are quite a bit more stringent than those for pleasure boats, and must be USCG Documented for commercial use to be legal. In short, even with a six-pack or master license, you still cant do it legally unless you are also set up as a charter boat. As previously mentioned however, if things were to go south on you, the Coast Guard will be least of your worries. The lawyers would tear you to pieces.


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## capt jgwinks (Sep 24, 2013)

The DNR inspection program can be seen at Michigan.gov/dnr
I've never done a six pack boat but I'm told is a real project to get a pleasure boat to pass. The documentation issue of interesting. If the boat is over 5 net tons it must be documented for Coastwise Trade. (5 ton is a measure of volume, not weight. It's about a 25 foot boat). There was a charter skipper in Wisconsin (no DNR inspections) who ratted out all his competition to the Coast Guard. He was the only operator in his port who was documented. When the CG got done investigating, he was the only one left in business. Nice guy.


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## TakeFive (Oct 22, 2009)

capt jgwinks said:


> ...There was a charter skipper in Wisconsin (no DNR inspections) who ratted out all his competition to the Coast Guard. He was the only operator in his port who was documented. When the CG got done investigating, he was the only one left in business. Nice guy.


If I had invested a bunch of money to properly equip my boat, as well as the significant ongoing costs of maintaining certification, keeping the boat fit, and keeping business-class insurance, I would also report any non-compliant competitors who were undercutting me. It's not about being a nice guy. The regulations exist to protect the safety of the paying passengers.


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## SHNOOL (Jun 7, 2007)

I'm going to revive this thread, because I stumbled across it by huge accident (looking for a fellow sailnetter who owns an S2 7.9)... anyway

Somehow, this topic passed me by, and it's even MORE interesting as TakeFive and I have met and he knows of exactly where I sail...

So I'm going to assume (and yes I know what that does)... that my puny little inland lake in this good old US of A, also follows under the inland lakes portion of the Coasties Charter. 

A little history: EVERY YEAR our sail club "donates" sailboat rides to people attending our lake festival... 

FOR THE FIRST TIME, THIS YEAR the sail club asked for donations to a local charity (in this case the Red Cross). It was a small donation of I think $5 (per person), but many of us asked EXACTLY this same question, the result of which was a waiver that was signed (something I didn't personally look at, and probably should have)... 

The question we asked is, "isn't that taking money for sailboat rides (a limited 1 hour charter if you will). " Again in years past this was a free event, so no money was exchanged. So the waiver is what they came up with.

I'm thinking we ought to just consider dropping the donation part if we continue this.

Sorry to beat this dead horse but we have a couple OUPV license holders in the club who thought it wasn't a problem, but then I suppose it wasn't, at least for them.


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## sailingfool (Apr 17, 2000)

SHNOOL said:


> ...
> 
> Sorry to beat this dead horse but we have a couple OUPV license holders in the club who thought it wasn't a problem, but then I suppose it wasn't, at least for them.


Not a problem with the USCG, but unless these individuals have commercial operator insurance on their vessels, they would run a personal risk. If someone was injured while on a donated (paid-for) ride, the standard insurance would probably not cover the claim.


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## mstern (May 26, 2002)

sailingfool said:


> Not a problem with the USCG, but unless these individuals have commercial operator insurance on their vessels, they would run a personal risk. If someone was injured while on a donated (paid-for) ride, the standard insurance would probably not cover the claim.


Why do you think it's not a problem with the Coast Guard? Do you mean that prosecution is unlikely, or that you don't think a license is necessary to perform this service?


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## TakeFive (Oct 22, 2009)

John - As you know, I'm not a lawyer, but I can pretend. 

The issue of liability needs to be separated into civil and criminal. Civil liability is always a concern. Anyone can sue you for anything. No way to stop them. They may not win, but everybody will lose (except the lawyers). Judges rarely throw out cases, because they're lawyers too, so they make sure their buddies always win (even when they lose). So you can be sure that getting sued by someone will be a drawn out process. Make sure your insurance covers it so you can hand the case over to them and let them worry about it.

As for criminal liability, that's where the permitting comes into play. Lake Wally's jurisdiction is complicated by the fact that it's private property, owned by PPL (may change in the near future). I don't believe that USCG has any jurisdiction. PPL has probably enlisted the state to handle law enforcement activities, and I'm sure you've seen the state police boats from the Fish & Boat Commission.

If you want to check out the permitting requirements that are specific to the lake, I'd call PPL and hopefully they'll know who could answer the question.


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## Stumble (Feb 2, 2012)

As an addendum, thanks to some paid work for a local non-profit I had to explore this issue extensively just a month or so ago. There actually is a regulation that allows the local Coast Guard commander to grant an inspection waiver to a vessel, for up to four events a year, so long as all the proceeds go to a 501c3 non-profit. 

Note that this does not waive the requirements for a licensed captain to be aboard, nor does it provide any civil liability coverage. But at least the vessel doesn't have to be inspected.


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## DivingOtter (May 5, 2012)

When I was a helicopter pilot we did some charity raffle rides. Although I was a commercial pilot with 3500 hours, if a private pilot did the same thing, on his dime and not take any money, and I mean so much as money for fuel or a tip, it is considered a simple passenger flight. So long as you are not a "for hire" you are good. It is the same as taking any of your friends out for afternoon sail and cocktails.


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