Interest Deduction
So how do you get around the catch-22? You can't say "live-aboard", but you need mortgage forms. You said "up front". Are these forms available after the fact?
Bestfriend & Hellosailor
I did a little research ... here's the bottom line up front from what I understand.
-A properly equiped boat can qualify as either your "Main" or "Second" home.
-A loan on such an residence does not require a Form 1098.
-The interets paid is decuctable.
My lender mentioned that they knew nothing about any "up front" requirements for claiming mortgage deductions. Here's what the IRS says:
Pub 936 Home Mortgage Interest Deduction,
Page 2, Qualified Home
Qualified home "... boat, or similar property that has sleeping, cookin, and toilet facilities."
Main Home - "You can have only one ... ordinariliy live most of the time."
Second Home -"a home that you treat as your second home."
Page 7, Mortgage Interest Statement
"... you generally will recieve a Form 1098 Mortgage Interest Statement, or similar statement from the mortgage holder."
Instructions Form 1099,1098 ...
Page 1098-1, Mortgage Defined (pp. 22 on the .pdf)
"If property that secures the loan is not real property, you are not required to file Form 1098. However, the borrower may be entitled to a dedcution for qualified
residence interest, such as may be the case for a boat, which has sleeping space and cooking and toilet facilities, that the borrower uses as a home."
BUT WAIT THERE IS MORE!!!
Qualified residence interest is defined in § 163(h)(3) as any interest that is paid or accrued during the taxable year on
acquisition indebtedness or home equity indebtedness with respect to any
qualified residence of the taxpayer.
Section 163(h)(3)(B) defines
acquisition indebtedness as any indebtedness that is incurred in acquiring, constructing, or substantially improving any
qualified residence of the taxpayer and is secured by such residence.
The term "qualified residence" is defined in § 163(h)(4)(A) as the principal residence (within the meaning of § 121) of the taxpayer and one other residence of the taxpayer that is selected by the taxpayer for the taxable year and that is used by the taxpayer as a residence (within the meaning of § 280A(d)(1)).
WHEW!!
Pass "Go" and collect $200 ... or whatever it makes you.
Disclaimer - I'm just a guy with internet access and time to kill. I'm not tax lawyer. So don't cheat on your taxes because it buys my ammo and fuel.