If you’re in the market for a new vessel, it’s essential to know the requirements for a properly documented vessel. Your state may require annual registration and titling if you keep your boat in the water. Even if your boat is on a trailer in your driveway, you may need to get a title in certain states. To sign up, you’ll need specifics about the boat, such as its length and serial number.
You’ll also be asked for specific personal details. Present a bill of sale as evidence that you are the rightful owner of the boat; this document should have the names and signatures of all parties involved, the year of purchase, and the total money paid for the vessel.
If you want to establish how long you’ve owned a boat, you need to have the seller or their agent sign a bill of sale and include the boat’s odometer reading. A notarized declaration from the seller or yourself attesting to the length of time you’ve been the legal owner will do in its place. Here are the requirements for a properly documented vessel.
The Vessel Must Be Owned By A U.S. Citizen or Permanent Resident Alien
Every foreign-owned boat above 60 feet in length must register with the USCG (or documented and numbered). A ship may be registered with either the United States Coast Guard or the maritime authority of the nation of its origin.
A vessel owned by a U.S. citizen is not required to be recorded by the USCG but must be documented by the maritime authority of its country of origin. To avoid confusion, foreign-owned boats that are only temporarily in the United States—for example, those undergoing repairs at a shipyard in the United States—are exempt from the requirement that a documented vessel display the flag of its home country.
If this sounds like your predicament, contact your local maritime authority and the U.S. Coast Guard to find out which flag you may fly in American waters and whether or not you need to register your boat. A legally documented vessel may only be owned by one individual (except married couples).
The Vessel Must Have a Valid Certificate of Documentation (COD) With an Expiration Date
The United States Coast Guard (USCG) is the government agency responsible for controlling commercial ships. A certificate of Documentation (COD) is a document issued by the U.S. Coast Guard that certifies a ship has been documented and is in good standing.
A COD is valid for a certain amount of time and may be renewed, but if a vessel doesn’t do so before the COD expires, it loses all of its privileges as a documented vessel and must sail without one. A COD that is not expired or otherwise invalid is not acceptable documentation for a ship. Being “in good standing” refers to the COD not having expired, revoked, or suspended.
All necessary endorsements must be included on the COD, and the phrase “in good standing” must be printed in either red or black ink on the front of the document. A COD’s limits, if any, must be fulfilled to avoid incurring fines. For instance, if a ship is only authorized for operation in coastal waters, it must get permission from the U.S. Coast Guard to cruise more than three nautical miles from land.
The Documented Vessel Must Be Used in Commerce
The ship must first be put into commercial use. This is a crucial regulation to observe since it stops you from deducting a parked boat as a business expenditure. Be sure that the yacht you’re writing off is genuinely being utilized for commercial reasons since the IRS has been known to go after those they suspect abusing the tax system.
To be considered a suitable vessel under Section 183 of the Internal Revenue Code, the vessel must serve a commercial purpose and be operated for that purpose. An individual who solely uses his boat for recreational purposes cannot legally register it as a fishing vessel.
Those who want to write off the cost of their kayak as a business expenditure must provide evidence that it is integral to their line of work, such as working as a tour guide giving clients kayak excursions of the bay. The vessel must be registered with the U.S. Coast Guard or Vessel Documentation Online LLC and must also be documented with the state (if required).
You can learn more about adequately documenting your vessel by calling Vessel Documentation Online LLC at (877) 564-1398. With the help of our knowledgeable representatives, you’ll be able to ensure that your vessel is safely and legally documented. At the same time, their guidance will ensure that you’re making the best decisions for your vessel and its future.