Nicki. M., an individual, has started up a charter yacht service (called Starships) and a marina in 2014 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 2014 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).

The business has a marina building, purchased and placed into service on January 3^rd, 2014, and four yachts (10 year property), bought new and placed into service on:

yacht # 1, bought for $ 675,000 on January 8^rd, 2014,

yacht # 2, bought for $ 625,000 on March 28th, 2014,

yacht # 3, bought for $ 500,000 on October 2^nd, 2014, and

yacht # 4 bought for $ 450,000 on December 8^th, 2014.

The marina building was bought for $ 5,000,000 with a down payment of $ 1,000,000 and the rest from a loan from a bank. The bank loan has an 8 % interest rate, and the loan was taken out on January 3^rd, 2014, and has been outstanding all year long. Only interest was due to be paid on the loan during 2014, 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 $ 80,000 in January 2014. The bank loan will require a $ 100,000 payment toward principal on January 3^rd of each year (starting with 2015) until repaid in 40 years.

An insurance policy covering four years of accident liability was bought for $ 960,000 on January 3^rd, 2014 and Nicki paid for it in full, immediately. Nicki has ten employees who maintain and crew the ships, each is paid 80,000 a year and each is fully subject to FICA and Medicare. Nickis business combined FUTA and SUTA rate is 6%. The last paycheck will go out on 12-31-2014, and Nicki will deposit the payroll taxes due up till then on that date.

The real property taxes on the Marina are $ 376,000 for the 2014 year and will be paid half on 12-10-2014, and the rest on 4-10-2015. The annual personal property taxes on the yachts for the year 2014 will be $ 42,000 each, and will be paid half each on the same days as the real property taxes. Nicki paid $ 6,000 each on annual licenses on the yachts when she bought them. Nicki paid $ 196,000 on December 1^st 2014, for fuel and supplies that she got a bulk discount for, she fully expects to use them up between then and May of 2015.

The business gross receipts during 2014 were in excess of $ 5,000,000 (all from services) and all other allowable business expenses were only about $ 1,200,000, so Nicki would like to maximize allowable tax deductions, given the facts above what expenses can Nicki claim for 2014? (SHOW ALL WORK)