$8,000 Tax Credit

[thesnort]

Does the homebuyers' tax credit (U.S.), due to expire soon, apply to a boat one buys to live aboard?
Google hasn't convinced me yet. Does anyone know?

[Mimsy]

I would talk to a CPA. Its a big enough amount to be worth seeing if it qualifies as a legal dedecution and also a big enough amount to tick off the IRS if you aren't really entitled.

[denverd0n]

For purposes of the home mortgage deduction a properly-equipped sailboat or RV can qualify as a "home," so it seems logical that the same would apply in this case. My guess is that you won't get an absolutely definitive answer on this, however, until someone tries it and either the IRS accepts it or it goes to trial.

Remember, however, that the credit is actually more like an interest-free loan--you have to pay it back over the course of 15 years. Also, it cannot be used for a second home, a rental property, or anything other than your primary residence. Finally, to qualify, you have to meet certain income limits and you cannot have had any ownership interest in any home within the last three years.

[winddancer88]

Originally Posted by denverd0n

For purposes of the home mortgage deduction a properly-equipped sailboat or RV can qualify as a "home," so it seems logical that the same would apply in this case. My guess is that you won't get an absolutely definitive answer on this, however, until someone tries it and either the IRS accepts it or it goes to trial.

Remember, however, that the credit is actually more like an interest-free loan--you have to pay it back over the course of 15 years. Also, it cannot be used for a second home, a rental property, or anything other than your primary residence. Finally, to qualify, you have to meet certain income limits and you cannot have had any ownership interest in any home within the last three years.

For principal residences purchased between January 1 and December 1, 2009 you no longer have to pay back the credit, provided you live in the home for at least 3 years.

[winddancer88]

Originally Posted by thesnort

Does the homebuyers' tax credit (U.S.), due to expire soon, apply to a boat one buys to live aboard?
Google hasn't convinced me yet. Does anyone know?

This is the closest I've come to a definitive answer. The IRS instructions for Form 5405 read as follows:

"Your main home is the one you live in most
of the time. It can be a house, houseboat, housetrailer,
cooperative apartment, condominium, or other type of
residence."

I think a liveaboard can be construed as a "houseboat".

[winddancer88]

And don't forget, this is still a "First-Time" homebuyer's credit. If you've owned a home within the last three years, no credit for you. Note that there has been talk in congress about extending this credit to all homebuyers.

[thesnort]

Thanks for your replies! Winddancer, thanks for doing the research on this. You're a better man (woman?) than I.
I posted the same question on another forum and the replies support what you say: $8,000 Tax Credit - Cruisers & Sailing Forums