My wife and I are partners/members of a partnership/LLC that owns a charter sailboat. The boat was in charter from October 2021 until July 2025. Relevant details are:
- The boat was based in Tortola, British Virgin Islands. Therefore, ADS must be used to calculate depreciation.
- The boat is not qualified property because ADS is required.
- The boat is listed property because a boat provides transportation and, perhaps, entertainment.
- We use "Z Other" as the Asset Type.
- We use "00.28", "Vessels" as the Asset Class and 18 year, straight line, mid-quarter depreciation.
We terminated our contract with the charter management company in May 2025 and sailed the boat to Annapolis arriving on June 30. We flew home to Colorado on July 3. As we were interested in keeping the boat in charter until we had to return home, we have designated July 3 as the conversion-to-personal-use date. The boat has been listed for sale since sometime in 2024.
How do we use TT business to report the conversion to personal use? The Disposition section of the Asset Entry Worksheet allows entry of a disposition date and the annual depreciation appears to be pro rated correctly. However, entering $0 as the sales price and sales expense results in a very large Asset Loss, which is not true since the boat has not sold, yet. Some advice on how to enter this information in TT is needed.
