SailNet Community - View Single Post - Capital Gains / Taxes
View Single Post
  #1  
Old 02-12-2008
punjabi's Avatar
punjabi punjabi is offline
Senior Member
 
Join Date: Jul 2007
Posts: 168
Thanks: 0
Thanked 0 Times in 0 Posts
Rep Power: 7
punjabi is on a distinguished road
Capital Gains / Taxes

I was reading another thread that was discussing taxes and it got me wondering...

I know that if I take a loan on a boat, I can deduct the interest as the boat is a second home (head and galley). Does that also mean that any capital expenditures I make on the boat (equipment, sails, anything really) can be used to increase my cost basis? If that's the case, I would imagine you could generate a huge capital loss over the time you own the boat as you will sell it for less than you paid (plus any expenditures).

So if I buy a boat for $25k and spend $25k on it over the time I own it and then I sell it five years later for $15k, I will have a capital loss of $35k to offset gains on a regular home.

Am I right?
Reply With Quote Share with Facebook