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Old 07-24-2007
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Boat as Second Hone Tax Advantage?

I was told my sailboat would qualify for 2nd Home tax advantage here in Texas. Since purchasing it I have been unable to find out how to take advantage of the sales tax and interest financing tax breaks. I have searched the Web and visited http://www.window.state.tx.us/taxinf...x/exmptns.html where it says I can have Homestaed Exemption on only one property, which is of course my land based home.
Can I get any tax breaks on my interest and sales tax for my boat and if so how do I do that?
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Old 07-24-2007
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I deduct boat loan interest expenses from the prior year on my federal tax return. RI boat owners are exempt from State luxury/property taxes, one of the few financial percs of owning a boat in this State.
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Old 07-24-2007
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Don't know about Texas but interest on your boat loan is Federally deductible as a 2nd home (assuming there is a head and stove). You may also be able to take off the sales tax if you choose to itemize it rather than take the standard credit.
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Old 07-24-2007
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ditto Interest is Federal Income Tax Deduction.
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Forms?

Thanks Cam. Are there any forms to fill out (in Texas you have to claim "Homestead Exemption" on your home by filling out and submitting a form to the state to get the tax break) or do I just file the interest with my Federal Tax Return?
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Old 07-24-2007
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federal tax

I believe Texas is a non-income tax state. Therefore, you would take your interest deduction on your federal tax return. You will only get to use it if you itemize your deductions.
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Old 07-24-2007
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Quote:
Originally Posted by CapnSantiago View Post
Thanks Cam. Are there any forms to fill out (in Texas you have to claim "Homestead Exemption" on your home by filling out and submitting a form to the state to get the tax break) or do I just file the interest with my Federal Tax Return?
For the federal income tax deductions, you just need to file Schedule A, Itemized Deductions (assuming that your itemized deductions are greater than your standard deduction). You can deduct any property tax and any interest you pay on your second home. Any boat, RV , cabin, etc. can be a second home provided it meets the following criteria: sleeping quarters, cooking facilities, a bathroom, and you spend at least 15 nights a year there.
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Old 07-24-2007
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The answers that you are getting on the Federal deductions are correct. I believe where you are confused is on the state level. I think that Texas is like Michigan where you are abused on your second home state and county property tax. In Michigan it works out to about double property taxes on your second home, almost all of which is school taxes. In that way those that do not get to vote on the issues get to pay about 5 times as much school tax as those who do vote on the issue. Then the locals are surprised that it passes?
Your primary home is your homestead, your second property is non- homestead. You get to deduct your mortgage for the second home, and if you pay property tax you cana deduct that as well.

In any event, most states do not tax boats as personal property, and only get them on the sales tax. Capture the savings on the Federal level and in most cases it falls to the state level as well. If you itemize, and if you have enough, you may be able to get a break on your sales tax. Thats what tax preparers are for.

Last edited by tommyt; 07-24-2007 at 10:36 AM.
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I deduct Interest on boat loan, County property tax on boat and County property tax on slip I rent from the county. Last tax is new and currently under appeal.
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Can You write off depreciation?
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