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  #1  
Old 12-21-2007
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Tax Implications of Boat Ownership

I'm aware that if your boat has a head and galley the interest on the boat loan may be deductable. Are there any other federal tax implications associated with owning such a boat? I apologize if this has already been discussed but I could not find it in a search.
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Old 12-21-2007
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I claim mine as a second home (even though there is no "first home"). If you use your boat to entertain for your business you can claim that also, but you should have fuel, food, and beverage reciepts to back that up.
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Old 12-21-2007
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Sapper,
Thanks. As a second home can you depreciate it or claim expenses? Anyone ever come after you for that?
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Old 12-21-2007
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I've never heard of anyone being able to depreciate a 2nd home, unless used as a rental of some sort. You can deduct interest, licensing expenses etc. assuming you have enough expense for a Sch A?

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Old 12-21-2007
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Exclamation Run!!! It the tax man!

This one of those IRS red tape, if, you know what things.

Heck, the Government makes the Tax laws and the IRS interpret them.

This link to the IRS may help (Boats are mentioned in this);
http://www.irs.gov/publications/p936/ar02.html#d0e537

If, I remember, I ask my sister tomorrow, she do taxes for people and learn all the new babble every year. Someone may give better detail before then.
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A second home has the same benefits a first home has as far as the IRS. Unless you are also chartering the boat and making it a business, you cannot depreciate it. It will depreciate itself, but you get no benefit from that from the IRS. Hey, be happy you can afford the boat, don't look for the government to help you much on this one. It is a luxury you know, but no longer taxed as such.

Even as a charter, you have to have other passive income to offset to get benefits from depreciation. In the charter business, it is the same as owning any other boat: Unless you have other passive income to offset with your losses(and unless you are in the BVI's you will have losses), the happiest day is the day you sell the boat (business) and then you can claim the depreciation. Big payday then!

Oh, and unless it is a business, your slip fees are not deductible as part of the second home mortgage unless you actually buy the slip. Then of course you can deduct the mortgage interest and taxes on the slip. I used to break up laughing at friends that said I was so lucky to be able to deduct my car as a business expense. Hey, I think I wrote a check for that car they think is free.

Last edited by tommyt; 12-21-2007 at 11:14 PM.
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Old 12-22-2007
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Quote:
Originally Posted by teshannon View Post
Sapper,
Thanks. As a second home can you depreciate it or claim expenses? Anyone ever come after you for that?
I've not tried that, i just claim the intrest.
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Old 12-22-2007
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Smile

It's really not a luxury, I need it for my sanity.
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Then is may be a medical deduction ......


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It's really not a luxury, I need it for my sanity.
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Smile

Yes, a medical deduction! I like that. I'll let you know how I make out.
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