Julie Posted August 10, 2008 Report Share Posted August 10, 2008 Does anyone have any experience with lifetime licenses? I'm wondering how long they should be amortized. Client is considering buying a $30K lifetime commercial fishing license. Quote Link to comment Share on other sites More sharing options...
jainen Posted August 11, 2008 Report Share Posted August 11, 2008 >>lifetime licenses<< As Section 197 property, a license is amortizable over 15 years starting the later of either the month of acquisition or the month placed in service Quote Link to comment Share on other sites More sharing options...
Julie Posted August 11, 2008 Author Report Share Posted August 11, 2008 Thanks! Client is 80, so will not want to hear that. The likelihood that he will be fishing commercially in 15 years is not all that high. But I printed out the section to highlight and show him. >>lifetime licenses<< As Section 197 property, a license is amortizable over 15 years starting the later of either the month of acquisition or the month placed in service Quote Link to comment Share on other sites More sharing options...
jainen Posted August 11, 2008 Report Share Posted August 11, 2008 >>The likelihood that he will be fishing commercially in 15 years is not all that high.<< Not to worry! The lifetime license is only good for sport fishing anyway. He can't amortize it, because he can never place it into service for commercial use so it is not an ordinary and necessary business expense. Actually, at $30,000 he must be referring to some kind of private membership, not a license. Quote Link to comment Share on other sites More sharing options...
Julie Posted August 12, 2008 Author Report Share Posted August 12, 2008 No, this is a commercial fishing license, for (I think) blackcod. I'm sure you already know that commercial salmon fishing has been banned entirely in California for the second year. The fishermen are getting some payments from the government for the complete loss of their livelihood, and he's looking to invest the money in a license for another species. >>The likelihood that he will be fishing commercially in 15 years is not all that high.<< Not to worry! The lifetime license is only good for sport fishing anyway. He can't amortize it, because he can never place it into service for commercial use so it is not an ordinary and necessary business expense. Actually, at $30,000 he must be referring to some kind of private membership, not a license. Quote Link to comment Share on other sites More sharing options...
jainen Posted August 12, 2008 Report Share Posted August 12, 2008 >>a commercial fishing license, for (I think) blackcod<< Okay, that's not California. He's talking about getting a federal permit to fish up around Alaska. They are limited, so he has to buy it from a private party. Quote Link to comment Share on other sites More sharing options...
Julie Posted August 12, 2008 Author Report Share Posted August 12, 2008 This is California. If they were going to Alaska, they could still fish salmon. And yes, they are limited, and the licenses, which can cost up to $100K, are linked to specific quotas. He's looking at one with a high enough quota to keep him in business for a few more years. >>a commercial fishing license, for (I think) blackcod<< Okay, that's not California. He's talking about getting a federal permit to fish up around Alaska. They are limited, so he has to buy it from a private party. Quote Link to comment Share on other sites More sharing options...
jainen Posted August 12, 2008 Report Share Posted August 12, 2008 >>If they were going to Alaska<< Well, I'm not a fisherman, but I must assume "black cod" doesn't mean the true black cod, which requires a trip to the south pole. No doubt he means sablefish, which is indeed regulated by that kind of limited permit. They used to hang out in the Bering Sea; maybe climate change is bringing them south. Quote Link to comment Share on other sites More sharing options...
Julie Posted August 13, 2008 Author Report Share Posted August 13, 2008 I think it's also known by the name "butterfish," as well as a few others. I hadn't seen the name "sablefish," but it appears to be the same thing. Fishermen often use different names for the various species than you'd see in the market, or in books. I don't know about climate change being a factor here, although maybe it would bring them down your way. I think they've always caught a few off Mendocino and Humboldt counties, at least occasionally. >>If they were going to Alaska<< Well, I'm not a fisherman, but I must assume "black cod" doesn't mean the true black cod, which requires a trip to the south pole. No doubt he means sablefish, which is indeed regulated by that kind of limited permit. They used to hang out in the Bering Sea; maybe climate change is bringing them south. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted August 13, 2008 Report Share Posted August 13, 2008 Either way, he's stuck with the 15 years, although you should be able to write ithe balance off in full in the year he retires for good. Quote Link to comment Share on other sites More sharing options...
Julie Posted August 13, 2008 Author Report Share Posted August 13, 2008 Yeah, I read the section after jainen's first reply, and it's pretty clear. They're trying to determine whether the permit will be transferable and could be sold if he decides to retire, before deciding whether to make the investment. Either way, he's stuck with the 15 years, although you should be able to write ithe balance off in full in the year he retires for good. Quote Link to comment Share on other sites More sharing options...
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