My husband is self-employed by providing respite care for mentally challenge adults. Once a year, he takes them on a 2 week vacation and does a lot of activities with them (such as boat rides, bowling, amusement parks, going out for ice cream, etc.). All of these activities are fully deductible. This year, he rented a boat and unfortunately caused about $10,000 worth of damage when he hit submerged rocks. Under what expense category in Turbo Tax should I file this? I was thinking it could go under "Business Travel' which includes renting vehicles. Thoughts?
First, what kind of business? Single member LLC? sole proprietorship? multi-member LLC? Partnership? S-Corp? C-Corp?
This year, he rented a boat and unfortunately caused about $10,000 worth of damage when he hit submerged rocks.
Was this covered by any type of business insurance you two pay for? If so, was it covered in full? If not covered in full, what percentage was covered or what was your business "out of your pocket" deductible that you had to pay?
If it was not covered by insurance, did you pay the entire amount of the damages in 2019?
I need these details to determine and inform you of the best way to deal with this on the tax return.
The business is a sole proprietorship. There is no business insurance. The homeowner insurance would not cover it as the motor was greater than 50 hp. We paid the damages in full in 2019 from our savings.
Thanks for your help!