Tax Prof Boat

A Tax Prof recently bought a boat and debated with family law- and tax-related names for the boat. Among the contenders:

• 501 Sea 3
• Boat Rudder-Ginsberg
• Brilliant Deduction
• The Carryover Depreciation
• Floating Interest
• Loophole
• Married Sailing Separately
• Midlife Criseas
• Noscitur a sociis
• Offshore Haven
• Offshore Shelter
• Our Court Ship
• Playing the Float
• Row V Wave
• Sail Proprietor
• Sea id.
• Step up in Bay Seas
• Sunk Cost

For the deductibility of the boat, see Henry v. Commissioner, 36 T.C. 879 (1961):

Robert Lee Henry, hereafter referred to as petitioner, is and was in 1954 a certified public accountant, licensed in the State of New York, and a member of the New York Bar. He is now a member of the Florida Bar. ... As a CPA and lawyer, petitioner developed into a tax specialist, but his law practice is not devoted solely to that specialty. ...

When petitioner bought [the boat], he hoped that he would be able to make contacts among yacht owners and that his professional clientele would consequently increase. ...

To attract attention, he flew a house flag colored red, white, and blue and bearing the numerals "1040." As he hoped, other yacht owners did inquire about the meaning of the numbers on his flag.

Petitioner, his wife, and their son adopted a standardized reply to such inquiries; they explained that the numerals represented the number of an individual Federal income tax form and that petitioner specialized as a tax specialist. Arising from this gambit was the opportunity to talk business. Petitioner says that results from these discussions have been good and that his engagements have not been limited to tax matters. ...

The record does not convince us that the operation of petitioner's boat in 1954 was not for primarily personal ends, and that it was proximately related, and was ordinary and necessary, to petitioner's business. ... We conclude that the yacht expenses here involved are not deductible as ordinary and necessary expenses of carrying on petitioner's trade or business in the taxable year 1954.