"Take it from me. You can write it off. What the hell, double the write-off. You are entitled to it."
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| Is it tax deductible? https://www.smwebhead.com/phpBB3/viewtopic.php?f=2&t=5287 |
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| Author: | Sounder [ Wed Mar 31, 2010 1:33 pm ] |
| Post subject: | Is it tax deductible? |
I recently read an article about boat interest being deductible as a second home. Briefly, the article said you must have a sleeping area, head, sink, and cooking area to qualify. Boats as small as 20 feet may qualify. The IRS is so busy with other stuff (and now have to worry about your medical insurance qualifications), and this particular issue is low on the radar screen, so an audit is unlikely. So, here's my boat: 23 foot Four Winns F224. It has a semi-permanent pole mount grill attachment, sink with potable water, porta-potty in an enclosed head area, and a full camper canvas enclosure. Does it qualify? Anyone know? |
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| Author: | 230 Mike [ Wed Mar 31, 2010 1:39 pm ] |
| Post subject: | Re: Is it tax deductible? |
I don't know the answer, but since the IRS is in the process of hiring 16,000 additional agents as a result of health care I wouldn't assume this will drop off their radar. |
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| Author: | aguyindallas [ Wed Mar 31, 2010 1:43 pm ] |
| Post subject: | Re: Is it tax deductible? |
Yes, the sink and the potty are the "qualifiers" |
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| Author: | cougarcruiser [ Wed Mar 31, 2010 2:04 pm ] |
| Post subject: | Re: Is it tax deductible? |
If you get audited, your boat will not qualify. I asked my accountant about the H240 because I had a grill -- and he advised seriously against it. I wouldn't risk it. |
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| Author: | Cap'n Morgan [ Wed Mar 31, 2010 2:29 pm ] |
| Post subject: | Re: Is it tax deductible? |
aguyindallas wrote: Yes, the sink and the potty are the "qualifiers" Not even close. The IRS defines a "second residence" as one with sleeping quarters, cooking facilities, and a toilet with running water. If your boat qualifies as a second residence, interest on the boat loan may be deductible. In order to deduct interest, the loan must be secured by the boat. The IRS will expect you to use the boat as a residence for at least 15 nights during the year. Documentation is required. Also recognize that a boat sitting on your trailer in the driveway with a camper top, an air mattress on the deck, and a grill on board will not meet the residence test. |
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| Author: | Wet Doggg [ Wed Mar 31, 2010 2:39 pm ] |
| Post subject: | Re: Is it tax deductible? |
It does not qualify...I would not risk the small reward you might get. |
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| Author: | Sounder [ Wed Mar 31, 2010 5:12 pm ] |
| Post subject: | Re: Is it tax deductible? |
INtereating comments. I am sure the 15 day rule only applies if you rent it out. Also I keep the boat in the water not on a trailer. The boat is the security for the loan. It's gray area I know. The savings is about $1k per year. Not a lot but not insignificant either. |
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| Author: | joet [ Wed Mar 31, 2010 6:30 pm ] |
| Post subject: | Re: Is it tax deductible? |
Our opinions mean nothing, it is the auditors opinion that counts. |
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| Author: | french829 [ Wed Mar 31, 2010 7:15 pm ] |
| Post subject: | Re: Is it tax deductible? |
I like the question and the thought that has gone into this--but I'm not sure I would risk it. |
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| Author: | powellcrazy [ Wed Mar 31, 2010 7:19 pm ] |
| Post subject: | Re: Is it tax deductible? |
I used my 35' 5th wheel RV for our 2nd home. A small cuddy is very questionable, now the vistas I would think they are equipped such that they would qualify. |
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| Author: | 298VISTA2000 [ Wed Mar 31, 2010 7:20 pm ] |
| Post subject: | Re: Is it tax deductible? |
"Take it from me. You can write it off. What the hell, double the write-off. You are entitled to it."
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| Author: | firecadet613 [ Wed Mar 31, 2010 7:26 pm ] |
| Post subject: | Re: Is it tax deductible? |
My 268 Vista, yes. When I had my 225 Sundowner no, and that had a dedicated sleeping compartment unlike your Funship. I wouldn't risk it for the minimal savings. |
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| Author: | Sounder [ Wed Mar 31, 2010 7:37 pm ] |
| Post subject: | Re: Is it tax deductible? |
298VISTA2000 wrote: "Take it from me. You can write it off. What the hell, double the write-off. You are entitled to it." haha I knew I could trust this group! 
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| Author: | Cincy Aquaholic [ Wed Mar 31, 2010 10:01 pm ] |
| Post subject: | Re: Is it tax deductible? |
The code is subject to interpretation. Despite some misinformation out there, the question is, is there any caselaw precedent that has ruled on these issues? I've researched it and haven't found any. My suscipion is that any audit dealing with this issue involves such a small penalty due to the amount someone would be claiming on a non-qualifying boat (ie a small cuddy) that the fight never gets to court. I suspect youre right that this alOne would not likely trigger an audit but if it did happen you are at the mercy of the auditor and the cost to fight and likelihood of a loss will result in you settling. So, you have to ask yourself, is it worth the risk? Might be. But I'd evaluate that risk in terms of whether I can accept the penalty that goes with the audit and not on the basis that I'd win the audit because it likely won't be cost effective. If it were me, I would not take it with your boat even though I'm low risk for audits to begin with. I know my current boat qualifies and it's a decent rebate. Remember that there is I believe a 7 year statute of limitations and if they nail you in year 7 those back taxes could really add up. |
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| Author: | Sounder [ Thu Apr 01, 2010 9:10 am ] |
| Post subject: | Re: Is it tax deductible? |
Great point, Cincy! Maybe I'll just have to get a bigger boat. 
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