Nicki. M., an individual, has started up a charter yacht service (called Starships) and a marina in 2019 in Newport Beach, California, in the same city where Nicki resides. Nicki qualifies to use the cash basis for the charter business.

Certain expenses and capital expenditures relating to 2019 are listed below. The charter business uses the yachts exclusively at the business establishment, and the yachts are used only in connection with Nickis charter business, Nickis principal trade. (thus the yachts are not subject to the listed property limitations, also these yachts are the only depreciable personalty put into service in 2019).

The business has a marina building, purchased and placed into service on January 6th, 2019, and five yachts (10 year property), bought new and placed into service on:

yacht # 1, bought for $ 918,000 on January 8^rd, 2019,

yacht # 2, bought for $ 907,000 on March 28th, 2019,

yacht # 3, bought for $ 965,000 on June 21^st, 2019,

yacht # 4, bought for $ 248,000 October 2^nd, 2019, and

yacht # 5 bought for $ 794,000 on December 8^th, 2019.

The marina building was bought for $ 7,500,000 with a down payment of $ 500,000 and the rest from a loan from a bank. The bank loan has an 7 % interest rate, and the loan was taken out on January 6th, 2019, and has been outstanding all year long. Only interest was due to be paid on the loan during 2019, and Nicki paid the interest on the last day of each month. In addition, points were required to be paid on the loan, of 2 % of the principal, or $140,000 in January 2019. The bank loan will require a $ 250,000 payment toward principal on January 6th of each year (starting with 2020) until repaid in 28 years.

An insurance policy covering two years of accident liability was bought for $ 840,000 on January 6th, 2019 and Nicki paid for it in full, immediately. Nicki has eleven employees who maintain and crew the ships, each is paid $100,000 a year and each is fully subject to FICA and Medicare. Nickis business combined FUTA and SUTA rate is 4%. The last paycheck for 2019 will go out on 12-31-2019, and Nicki will deposit the payroll taxes due up till then on that date. Nicki also pays within 2019 all the employees medical insurance annual premiums of $ 8,700 each.

The real property taxes on the Marina are $ 556,000 for the 2019 year and will be paid in full on 12-10-2019. The annual personal property taxes on the yachts for the year 2019 will be $ 87,000 each, and will be paid on the same day as the real property taxes. Nicki paid $ 5,000 each on annual licenses on the yachts when she bought them. Nicki paid $ 131,000 on December 1^st 2019, for fuel and supplies that she got a bulk discount for, she fully expects to use them up between then and May of 2020.

The business gross receipts during 2019 were in excess of $ 9,500,000 (all from services) and all other allowable business expenses were only about $ 2,600,000, so Nicki would like to maximize allowable tax deductions, given the facts above what expenses can Nicki claim for 2019?