Deductible expenses -- tax season - SailNet Community

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Old 02-19-2010
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Deductible expenses -- tax season

Having just completed my forms, the tax bite is on my mind.

I understand that you may deduct mortgage (interest) expenses for the boat as a second home if you live aboard 15 or more nights a year, but what else is possible / legal?

I'm especially interested in alternative energy tax breaks. What about solar panels? What about wind powered motion?

Maybe you should phrase answers along the lines of "I heard about someone who ...." No need for self-incrimination.

Thanks.
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Old 02-19-2010
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Here's what the Federal Gov't has to say about the solar (it also applies to wind generations as well)...

A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is on a new home, the "placed in service" date is the date of occupancy by the homeowner. Expenditures include labor costs for onsite preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The excess credit can be carried forward until 2016, but it is unclear whether the unused tax credit can be carried forward after then. The maximum allowable credit, equipment requirements and other details vary by technology, as outlined below.


Solar-electric propertyThere is no maximum credit for systems placed in service after 2008. The maximum credit is $2,000 for systems placed in service before January 1, 2009.

Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2016.

The home served by the system does not have to be the taxpayer’s principal residence.

Note that the Solar Energy Industries Association (SEIA) has published a three-page document that provides answers to frequently asked questions regarding the federal tax credits for solar energy.


I'd have to say it's allowed. Thank you, Nancy Pelosi
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Old 02-19-2010
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You can only deduct a mortgage interest expense on your boat if you took out a mortgage on the boat, IOW, if the boat is the asset on which the loan is based.

If you took out a personal loan for the boat it doesn't matter how often you stay on her, she's not deductible. This also applies to the solar deductions. If your boat is not a "second residence" with a mortgage on it, any solar installations are no more deductible than a solar battery charger mounted on the roof of your car.
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Old 02-20-2010
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I'd point out that regardless of whether you took out a marine mortgage or not, if the boat does not have a permanently installed head and galley—ie, no porta-potties, no camping stoves—then it does not qualify as a residence.
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Old 02-20-2010
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I'm surprised that I haven't seen more effort to promote the energy break for boats. Good information there.

Also, I want to clarify that the interest is deductible if the following is met. So, if you finance the boat secured by the first house, then it should be deductible. Also, clearly, using the boat to secure the loan would work.

"Generally, home mortgage interest is any interest you pay on a loan secured by your home (main home or a second home). The loan may be a mortgage to buy your home, a second mortgage, a line of credit, or a home equity loan."
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