Florida Yacht Charter Business Fights $1.5 Million Tax Bill

A Florida yachting venture that participated in high-stakes offshore fishing tournaments before unforeseen setbacks forced a pivot to luxury charters told the US Tax Court the IRS wrongly defined its business as a hobby and assessed more than $1.5 million in tax liabilities.

After the IRS determined Bad Daddy, LLC’s charter and fishing competition activities weren’t engaged in for profit under IRC Section 183, it disallowed deductions made for depreciation, salaries, repairs, marina fees, and other operating expenses, according to the petition.

Bad Daddy, through its partnership representative Robert Berg, asked the Tax Court in an April 29 petition ...