Re: IRS's Capital Construction Fund

Monterey

2009-05-01 16:41:20

Do any of you use the capital construction fund for commercial fishermen in your taxes (IRS publication 595)? Is it worth it?

- From what I read, it is used to defer or save for the cost of a boat or a rebuild. But given that the cost of limited entry fishing permits (salmon, crab, etc) easily exceed or equal the cost of a boat, and are then 'attached' to the boat and not the person, can one use this fund to save for the cost of a fishing permit? (I am trying to find a way to save for a crab permit)

- The CCF says that elegible fishing boats over 5 tons must meet ALL these requirements. Do you know what they mean by the last one?

a) Built or rebuilt in the USA (check)

b) Documented under the laws of the USA (check)

c) Be used commercially in the fisheries of the USA (check)

d) Be operated in the foreign or domestic commerce of the USA ( ???? )

I dont plan to transport cargo, just fish, and seems mighty strange to me that they would impose that kind of requirement on a fishing vessel. Am I reading that right? What do they mean by it?

I just want to hear your opinions on it from those that are already using it.

Thanks

Jon

2009-05-04 15:31:03

You can certainly use it for a fishing vessel in Alaska. I know people that have. I'm not sure about a permit.

d) Be operated in the foreign or domestic commerce of the USA ( ???? )

Sounds like some clause to verify the money made from the commercial activity is being retained in, or has some benefit to, the US.