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Am I
responsible for sales tax as a seller? - As the
seller, you are not generally responsible for paying taxes related
to the sale of your boat. A buyer is typically responsible for any
applicable sales, use, or excise
taxes. However, you may be required to collect and report sales tax
from the buyer if you are a business entity. Be sure to check with
the respective revenue collection agency for the state in which the
sale will occur to confirm this information.
Can I sell my
boat without using a broker? - There are many
good reasons for enlisting the services of a yacht broker,
especially for sellers who lack the time or inclination to undertake
such effort on their own. However, the "for sale by owner" option is
becoming easier due to the advent of online shopping via the
internet. In fact, most vessel transactions now originate from web
listings which are posted by both brokers and private sellers. This
has resulted in an enormous market place for boat owners who
wish to advertise and sell directly to the boating public.
How do I get a boat lien release from a failed bank? -
You can obtain a boat lien release from a failed, closed, or defunct
bank by contacting the Federal Deposit Insurance Corporation (FDIC).
They will need information about the boat loan and proof that it was paid
off. This would include a copy of the paid note, copies of
payment checks, or anything else that would indicate payment. The
following link will provide contact information and instructions for
obtaining a boat lien release from the FDIC:
http://www.fdic.gov/consumers/consumer/information/lien/Boat.html
How do I report the sale or transfer of my documented boat?
- You should have the vessel removed from documentation
immediately upon a sale or transfer of ownership. This can be
accomplished by sending the Coast Guard a written request for
removal from documentation. Surrender of the Certificate of
Documentation is no longer required because these are now re-issued
on a yearly basis and can be used for assigning ownership. If you
wish to actually record the change of ownership, it will be
necessary to file a bill of sale, an assigned certificate of
documentation, or some other instrument of transfer suitable for
recording. This can be implemented without having to re-document the
vessel and may be advisable if you wish to make sure your ownership
transfer is shown on the underlying abstract of title.
How important is reporting the sale or transfer of my boat?
- The "report of sale" is an important item often overlooked
by boat sellers during the commotion of finalizing a sales
transaction. Almost all state and federal titling agencies require
some type of written notification when a boat is transferred,
stolen, abandoned, or destroyed. Most jurisdictions require the
seller to file a "report of sale" form within 10 to 15 days. If the
vessel is documented with the U.S. Coast Guard, the owner must
notify the National Vessel Documentation Center by filing a written
request for removal from documentation.
Should I participate
in a paper trade on the sale of my boat? - Many states allow a
reduction in sales or use tax on a vessel purchase for the value of
a trade vessel. This has created a tendency among buyers to request
passage of title to their existing vessel through the seller and
then on to a third party. In a paper trade situation, the buyer
maintains control and possession of the trade pending delivery to
the third party. As the seller, you should should be concerned
the implications of stepping into the chain of ownership, even if
only from a technical perspective. Having become the seller of the
trade, you could become liable for
product or title warranties. This may also create tax obligations
depending on the jurisdiction and values of exchange. It
may be worthwhile to consult with an attorney or tax expert before
making such a commitment.
What kind of funds should I accept on the sale of my boat?
- As a general rule, any written instrument such as a check or
bank draft can be stopped or dishonored. This applies even to
cashier's checks, but these would be more difficult as they are
considered a direct obligation of the issuing bank. In this case,
payment could unlikely be declined unless there is a condition of
fraud, conversion, or theft. Checks drawn on or through foreign
banks are especially vulnerable as they may not be subject to the
same regulations that protect U.S. consumers. Of course, there is
always a matter of insufficient funds in the account on which a
check is drawn.
Where can I find marine, boat, or vessel escrow services?
- In the marine industry, you are not likely to find the
equivalent of typical real estate escrow services. Boat or vessel
escrows are for the most part handled by yacht brokers, commercial
lenders, a few documentation companies, and the occasional attorney
who is willing to become involved in such transactions. Other than
attorneys and commercial lenders, there is very little by way of
bonding, accountability, and governmental oversight with respect to
the way marine escrows are handled. Brokers are regulated in some
states, but documentation companies are usually not subject to any
such constraints. You should accordingly make a thorough
investigation or consult with an attorney before entrusting your
ownership releases or payoff funds to a marine escrow agent. |
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