Owners Only Stuff

By Jason Watson, CPA
Posted Sunday, May 25, 2025

There’s not a good place to discuss this issue, so we plopped it here. In a vacation home setting, you likely have an owners’ closet full of good pans and utensils, linens just for you, a Snuggie or two, and perhaps booze. Definitely booze. Generally, these purchases are not tax deductible. Got it.

But what about that golf cart you want to purchase for your short-term rental? Are you truly going to let your guests use a golf cart? Or is it for your personal use when you show up for repairs and a handful of personal use days? It is not out of the question, but you need to position yourself carefully. Does your VRBO or Airbnb listing mention golf cart use? Do you make the extra golf cart rental fee just a bit out of reach for most but reasonable?

WCG CPAs & Advisors recently had a client install a boat dock and lift. The cost was $70,000 or so. While this is a land improvement all the way for depreciation purposes, the question becomes- does this have any business use whatsoever? The boat dock and lift were installed for the personal boat of the rental property owner when they occasionally used the property (they would boat over from their primary residence which is kinda cool but it took almost a day).

One could argue that a boat dock and lift were necessary for the landlord to administer the rental property using a mode of transportation of his choosing. Perhaps. Maybe. Seems far-fetched. What’s next? Install a landing strip too? On second thought, that might not be a bad idea.

The IRS could argue that this improvement has nothing to do with the rental property itself since a boat is not being offered to guests. Recall that the expenditure generally has to be ordinary (everyone has one) and necessary (your rental would fail without one) to be a business use consideration. A counter point to that argument would be to buy a couple of kayaks or a raft or something that would need a boat dock. Install a swim ladder and a nice bench to watch sunrises from. Done! The lift portion of the boat dock and lift combo remains questionable.

The point to all this is that we all want to maximize the efficacy of a tax deduction and find the narrowest of margins between reasonable and downright nutty. Be careful. The more words you need to explain your sexy tax position the more likely you are going to lose.

Who wants more boats and golf cart considerations? Of course you do! What if you are concerned that parking a boat which you often use personally at your short-term rental taints the personal use component of the rental activity? Or, you are simply concerned about the optics and how your actions in one area might contradict your actions in another area. Or, you are concerned with risk and litigation when it comes to recreational equipment.

You could very easily rent the boat to guests separately from the rental property itself. Separate transaction. Separate agreement. Separate hold harmless stuff. You also might want to do this with other recreational equipment such as kayaks, rafts, bicycles, mopeds, scooters, etc. You and your family can easily use all this gear and also rent it out all the while keeping it separate from the short-term rental property itself. Yay!

Let’s dig into this more!