Sometimes boats and aircraft are used for private and commercial purposes. In such cases, the income from their use may be liable for tax.
Boats and aircraft (valued at more than $50,000) become mixed-use assets if they are used privately sometimes, and commercially at other times – and not used at all for 62 days of the tax year.
Income-earning days include time you spend either occupying or using the asset to:
- Repair damage, provided it happened during income-earning days and isn’t normal wear and tear
- Relocate the asset, if you’re paid to do that.
But just taking the craft out for repair, or to fix normal wear and tear, is private use.
You must keep a detailed logbook for each mixed-use asset that records:
- Date of use
- Number of flying hours (if an aircraft)
- Who used the asset (owner or other)
- If not the owner, who was the skipper or pilot
- What the use was
- If you received payment and, if so, was it at least 80 percent of normal market rates.