Trojans/IRS taxes

[jefflaw35]

Is it true that we can write off expences on these boats as a second home? If so, how and what are the rquirements?

[Stripermann2]

Is it true that we can write off expences on these boats as a second home? If so, how and what are the rquirements?

You can deduct the interest paid on a loan for the boat. As far as for expenses, no idea but don't think so unless you can prove it's business related.

Tax deductibility of interest on boat and yacht loans

Under IRC section 163 (h)(2) a taxpayer may deduct any qualified interest on a qualified residence, which is defined as a principal residence and one other residence owned by the taxpayer for the purpose of deductibility for the tax year. IRC section 163(h)(3) defines qualified residence interest as any interest which is paid or accrued during the tax year on acquisition or home equity indebtedness with respect to any qualified residence of the taxpayer.

In accordance with IRC section 163(h)(4), a boat will be considered a qualified residence if it is one of the two residences chosen by the taxpayer for purposes of deductibility in the tax year as long as it provides basic living accommodations such as sleeping space (berth), a toilet (head), and cooking facilities (galley). If the boat is chartered out, the taxpayer will have to use the boat for personal purposes for either more than 14 days or 10% of the number of days during the year the boat was actually rented, in accordance with IRC section 280A(d)(1).

Form 1098 is not necessary in order to receive the qualified interest deduction. In accordance with IRS instructions for Schedule A, form 1040, if the taxpayer does not receive form 1098, deductible mortgage interest should be reported in line 11 instead of line 10 on Schedule A.

http://www.excelcredit.com/tax_deductible.htm

[tsawyer]

I agree with the above on the interest. It is also subject to the overall limit on mortgage interest of $1M.

As far as other expenses, the answer is no unless you are claiming food and bait as business entertainment.

Dockage, insurance, repairs etc wouldn't be deductible unless the boat is in use in a business like chartering, etc.

Tsawyer, CPA

BTW - if you plan on trying to take some as business expense, you had better have really good records on who you took, why it was business and what you talked about that is business related. IRS likes boats about as much as planes.

[BobCT]

Nice to have a CPA on the board now isn't it?

[jefflaw35]

LOL yes it is!!! yes it is!!!! I figured this guy was full of it and didnt know what he was talking about. I just had to ask though!!