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Old 11-12-2009
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Owning a Sailboat - Tax Deductions..

Are their any tax benefits of owning a salboat?
I own a 1978 Catalina 25.

What is a way ( legally ) that I can use the boat somehow to reduce taxes?

Someone said start a business, claim the boat as depreication, and claim 'some' income, but you could write off the marina slips fees.. is that possible?

I suppose there are something to is because the CPA guys said it could be a second home.

Any ideas?
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Old 11-12-2009
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A boat can be considered a home, provided it has a permanent galley and head setup. Porta-potties and camping stoves do not cut it...
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Old 11-12-2009
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On this subject, and SpcAlan1 I do not mean to hijack your thread here, does a composting toilet count as a "permanent head" for tax purposes? Something like the Airhead or Nature's Head, I would consider permanent, since you're not carrying it out of the boat every couple days, and it stays in all season along with the waste/composting material.

Any thoughts on whether the IRS would see it that way?

By the way, PLEASE let's not go down the road of debating types of heads. I was just wondering, in line with SpcAlan1's original question, if a composter would "count".
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Old 11-12-2009
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The vessel would need to be licensed as commercial; USCG certified, and you would need to have an OUPV (Six-Pac) and run the boat as a for charter operation. All of that said you could then deduct for business expenses and cost but you can only do that for so long (3 years) before your business must show a profit. You might be able to claim depreciation; but boats that are maintained (as a charter boat would need to be) carry a market value. A '78 catalina 25 is probably fairly stable in market value (already fully depreciated).

Otherwise; if you live-aboard deduction for rent-paid and a percentage of credit for property tax is about all you can claim (that I know of).
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Old 11-12-2009
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What if you own your own business and use the boat for entertaining clients? That's one thing I'll be doing if I ever get a boat. I never considered the possibility of it being an expense though.
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Old 11-12-2009
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Quote:
Originally Posted by SpcAlan1 View Post
Are their any tax benefits of owning a salboat?
I own a 1978 Catalina 25.

What is a way ( legally ) that I can use the boat somehow to reduce taxes?

You should be able to deduct the personal property taxes in any event. If you live aboard or the boat qualifies as a second home, I believe you can only deduct the loan interest, but not the slip fees and expenses. If you entertain clients on your boat, it will be much like business lunches. You should be able to document the time used, who was there, what business was discussed, etc. I believe you will have to calculate the percentage of business use versus personal use.

Someone said start a business, claim the boat as depreication, and claim 'some' income, but you could write off the marina slips fees.. is that possible?

This seems to run contrary to your original desire to be legal about it.

I suppose there are something to is because the CPA guys said it could be a second home.

Any ideas?

Yes, get ready for an audit.
Mike
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Old 11-13-2009
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OK, so basically.. There are not any 'true' tax benefits from owning a sailboat?

Oh well.
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Old 11-13-2009
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I know of professional people, claiming boats a 2nd "office" as they do work on the boat. MD"S, Lawyers, etc.
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Old 11-13-2009
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Actually, I think you are getting some bad information here, however good intentioned. Here is what the IRS pub actually says:

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.


My Catalina 25 had a portapotty that was designed to attach on one side of the head with the sink on the opposite side. It also had a built in galley stove and sink.

This is in my opinion not the same as sticking a portapotty and a camp stove on a 20 foot sailboat with a bunk in a cuddy cabin.

If you have a loan on the boat, take the interest deduction.
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Well I paid cash for the boat.... so no interest.
so what you are saying IF I financed a boat that had a separate cabin, head, and galley you could write off the interest like my house, wow.
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