Transfer title to LLC and refinance the boat....?

Problem is that most day charters will be more than 6 pax (especially boatsetter or boatbound) which means bareboat charter and the owner can't be on board ...so you ll have to rely on whatever captain they supply.

If you want to do some limited chartering just keep the boat and financing the way it is

Often free advise is worth what you paid for it. I think this time you received very good advise for a bargain price. As to operating as a charter, no matter how structured, your marine underwriter is leaving town with Slim. My guess is your current insurance does not cover commercial use of the boat. Check it out.

Most decent insurance policies cover occasional charter as long as an approved captain in operating the boat. It s either written in the base policy or added as an endorsement On request

Occasional chartering isn't considered commercial use

For Uninspected boats the limit is 6 pax unless you do bareboat contract and in this case you CAN NOT be on board since you are the owner

Do not mess with this. You get boarded with 7 pax and you will be fined. Not worth it

The ride sharing sites like boat setters and boatbound list over 6 pax capabilities because they run under bareboat rules when over 6

The USCG district 7 has published a very helpful flyer which clarify charter rules

http://www.uscg.mil/d7/sectmiami/pdf/CharterBrochure.pdf

Owner ( perhaps with tickets) CAN be on board an uninspected vessel with 6 passengers or less.

It's the bareboat part where owners can't be oboard as master or crew.

Your sportfish example depends on the circumstances. Could be master (potentially owner) operating an uninspected vessel with a 6-pack license. Could be an inspected vessel, maybe more than 6 passengers, master (potentially owner) operating with tonnage ticket. Could be master with tonnage tickets on an uninspected vessel with 6 passengers or less. Depends.

-Chris

With 6 passengers or less then the owner can be the captain, it s a regular crewed charter with a single contract. This is how most smalle fishing charter operate.

It gets confusing when operating as a bareboat charter which is what this flyer mostly covers as there have been some abuse. This allows boats to carry up to 12 passengers plus the charterer. Bareboat charter means the charterer charters the vessel from the owner without crew and provides the crew. In theory the owner is not supposed to impose a specific crew although he has the right to approve or reject the crew selected by the charterer. It's a little silly as insurance policies on bigger boats specifically restrict operations to an approved captain

I don't think this needs to be as complex as some would suggest. Here are some ideas:

1. Create a small daily charter rate for the boat itself. It should be small, so you are not paying taxes on that income. That said, the rental income at the end of the year could/should offset any ancillary costs of renting the boat, such as increased insurance premiums, additional fuel, or charter provisions. The boat rental becomes a sort of "break even".
2. Personally rent the boat to an LLC that you own, on a daily basis, while the boat is under charter. Claim that income, and offset that income with any ancillary costs that are purely associated with the charter business rental (fuel, added insurance premium, provisions). Do not try to write off annual costs that would still be there if you had solely used the boat for personal purposes (loan payments, standard insurance, typical maintenance, dockage, etc.)
3. Add your own personal captain rate to the cost of the charter. Pay income taxes on whatever income you earn from this rate.
4. Confirm that your boat insurance would cover rental to a 3rd party. If not, get alternate insurance. Have the LLC get general liability insurance, and be sure to get personally named as an additional insured on the LLC policy.
5. Charter the boat, have some fun, meet some people, make a little money, and pay a little bit more in taxes. While doing all of this, try not to hit anything.

You won't get in trouble with the IRS, because you'll be paying some taxes, and it will be clear that you are not trying to turn personal expenses into business expenses. If something bad happens, you will be insured. You won't need a new loan, and you won't need to worry about your bank, as long as you keep paying 'em.

If you're really just trying to gain some excess income through a hobby charter business, this will work. If your real goal is to offset your typical ownership costs, you'll need more detailed legal/professional advice, akin to what others are suggesting.

Good luck.

You may call but you should decidedly not accept their answers as fact as their answers are likely not coming from lawyers and/or accountants, but sales people working for them.

Yep, a mod to the document stating new owning identity and $65 dollars.