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post #1 of 10 Old 04-06-2009 Thread Starter
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Boat as second home on taxes.

So a guy at west marine says I can claim my 25' boat as a second home on my taxes as long as it has a head, and galley. Esentially writing off a lot of expenses I have on the boat. If this is true, is there anything that I need to do at the begining of the year to make this happen, or do I just add it to my tax form next year?

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post #2 of 10 Old 04-06-2009
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zz - partly right, if you're using the boat for pleasure you deduct not the expenses, just the interest part of your boat loan. You should have gotten a statement from the loan compnay, that's all you need. (Unless you're making money by for example, charterning your boat - then it gets comlicated but essentially you pay tax on the income recieved and deduct the costs you incur to make that money, which includes maintenance, boatyard,etc) Our accountant also told us, though, that we CAN take the energy credit for installing solar panels since our boat is our primary home, how cool is that?
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post #3 of 10 Old 04-06-2009
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ZZ—

Be aware that to qualify for the second home (or primary home) deduction, the boat has to have a permanently installed head and galley... no porta-potties and no camping stoves allowed.

If your boat uses a porta-pottie or a camping stove, the interest is not deductible as the boat does not qualify as a residence.

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post #4 of 10 Old 04-06-2009
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I'm claining interest on the boat loan as tax deductible. That was part of my figuring in getting her. (swapping one form of summer fun for another, I partly justified it all by looking at what we wouldn't spend.)

Anyone know if I can deduct the wind generator bought last fall or solar panels (bought soon), even though we live on her only 2-3 months of the year?

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post #5 of 10 Old 04-06-2009 Thread Starter
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Oh, ok. Yeah, I definitely don't have a loan on the boat, never did. Oh well.

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post #6 of 10 Old 04-06-2009
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"just the interest part of your boat loan. "
I think there's one more important part of that. The loan must be a MORTGAGE secured by the TITLE to the property (the title to the boat) and not any other kind of loan. The IRS used to require a specific form from the lender indicating that security interest.
And IIRC the IRS also requires a permanent galley, permanent head, AND a place to sleep, i.e. at least one dedicated berth.

The IRS regulations are all very conveniently available on the IRS web site, I wouldn't take anyone's word on this (mine included) when it is so easy to go online and get the specifics from the source.

You can also call the IRS toll-free, and they'll tell you which publications have the rules, and mail them to you if you don't want to get them online.
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Quote:
Originally Posted by hellosailor View Post
"just the interest part of your boat loan. "
I think there's one more important part of that. The loan must be a MORTGAGE secured by the TITLE to the property (the title to the boat) and not any other kind of loan. The IRS used to require a specific form from the lender indicating that security interest.
And IIRC the IRS also requires a permanent galley, permanent head, AND a place to sleep, i.e. at least one dedicated berth.

The IRS regulations are all very conveniently available on the IRS web site, I wouldn't take anyone's word on this (mine included) when it is so easy to go online and get the specifics from the source.

You can also call the IRS toll-free, and they'll tell you which publications have the rules, and mail them to you if you don't want to get them online.
I'll have to call the bank and make sure they filed the right paperwork on their side, or whatever they or I need to do.

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post #8 of 10 Old 07-12-2009
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Not so sure about "permanent" head and galley

From IRS publication 936 available at irs.gov

"Qualified Home
For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.

The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. Otherwise, it is considered personal interest and is not deductible.

Main home. You can have only one main home at any one time. This is the home where you ordinarily live most of the time.

Second home. A second home is a home that you choose to treat as your second home
.

I don't see the work "permanent" regarding the head and galley. Other unofficial sites say a porta-potti and camp stove qualifiy. I don't have a loan on my C22, but I'm looking at bigger boats .....
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post #9 of 10 Old 07-12-2009
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"I don't see the work "permanent" regarding the head and galley."
Unless the IRS supplies a letter of advisory opinion or a definition of "facilties" everything is whatever they want it to be.
If you look at the general definitions of "facility" and "facilities" they refer to structures, locations, fixed installations. Not "cooking equipment" and "potty equipment" but fixed installations.
The rest is up to you. If the IRS challenges you--you don't get reimbursed for your expenses going to tax court and trying to defend your definitions versus theirs. Meanwhile, you've got to pay the taxes, penalties, and interest up front, or they tend to seize your assets.

Prove that it really is your principle residence, and you might get away with a tent and a cedar bucket though. Might. (G)
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post #10 of 10 Old 07-13-2009
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