US Flagged Ships
Tax Comparisons: Q & A
Q: What is the benefit of having a meeting on a US-flagged cruise ship versus a foreign-flagged cruise ship?
A: The cost of meetings held aboard US-flagged cruise ships can be fully deductible for tax purposes.
Q: How does the IRS determine if a meeting can be written off at a US hotel or US flagged ship?
A: Main purpose must be business.
Q: What constitutes a meeting for tax purposes?
A: The meeting, seminar or convention must be primarily for "business purposes" in order to claim any tax deduction. This would apply for Corporate as well as Association meetings. Please consult your tax advisor for travel expense deductibility requirements and limitations.
Q: What does the IRS mean by "business purpose" of meeting (listed in question above)?
A: The meeting must be directly related to the participant's trade or business. If the meeting, seminar or convention is for any other purpose (ie. investment, political, social) these expenses may not be deducted.
Q: Are the costs associated with a spouse or companion deductible as part of the meeting cost for a US-flagged ship or a US Hotel?
A: No, participants only.
Q: Does the $2,000 maximum deduction per participant per year vary based on the cruise length?
A: No, the maximum deduction per participant per year is $2,000 regardless of cruise length.
Q: Are there any US-flagged cruise ships in the market?
A: Yes, NCL's Pride of America sails year-round in Hawaii. There are also small riverboats and coastal cruising ships whose capacities are under 400 passengers.
Please consult your tax advisor regarding your specific cruise program.