Declaring your boat a second home

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UncleRichie

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C Dory Year
2000
C Dory Model
22 Cruiser
Vessel Name
C-Critter
This story was in the Seattle Post Intellgencer.
It turns out that you can get a tax break on your boat if it has a bed,port-a-potty, sink and a stove. You can deduct the interest you pay on your loan and the registration fee . The only catch is you have to spend at least 14 days a year on it, that should not be a problem for C-Dory owners.
sound good to me and the IRS doesn't have a problem with it.
Richard
 
This has been part of the IRS code for decades. Congress created it so they could deduct their yacht payment interest.

Search for "second home" in the IRS website.

You basically have to have a mortgage secured by the boat. And the interest on the loan is deductable. Registration fees are a new on on me and I'm skeptical.

Second home requires: sleeping, cooking, toilet facilities. I've never seen any 14 day minimum. Works for boats, RVs, etc. And actual fixed second homes.

-- Chuck
 
I've used when I've been house poor and boat rich. Now that I've got two houses and another one to boot, the boat deduction is moot. Very useful if you've got a $300K trawler. If you've only got one house and a C-Dory with a big loan, it'll work too. Have never seen the 14 day minimum, I do know if you rent stuff out (like a house), you need to use it to get the deduction.

Charlie
 
Went that route for the first 3 years, while I was still financing my boat. Not a very big savings, but any tax savings is worth it.

Lost it when I decided to pay off the boat.

But certainly an acceptable deduction, as far as the IRS is concerned.

Ken
 
Why trust the typically poorly researched newspaper article?

Read it from the horses mouth: IRS Publication 936. Start with Qualified Home on the bottom right of page two and read to your hearts content.

No declaration. No sink required. No registration fee deduction.

And no 14 days nonsense as the article quotes some GS-4. The link is a searchable .PDF file. Just search for 14 and then, just to be sure search for "day." Unless you live in your RENTAL PROPERTY for at least 14 days a year you can't claim it as a second home and take the deduction. Last sentence on page two is specific: You do not have to use the home during the year.

Canucks, of course, get screwed by their tax code for first and second homes. :P

-- Chuck
 
Richard,

Our C-Dory came with a small non-powered fridge from the factory which broke in the first rough water we encountered. When I returned it to the factory they told me the reason they installed it was that it was required by the IRS if I intended to write the boat off as a second home. Apparently quite a few C-Dory owners do write off the interest without any problems. I was impressed that the factory was so thoughtful but I'm happier with the shelf and door they installed in it's place.

Chuck, I agree with your statement "typically poorly researched newspaper article". I once nearly lost my job due to a newspaper article that completely misquoted an interview I gave. Fortunately my boss came to my rescure when she told the VP that in over one hundred interviews, she had never been quoted correctly either.

Now, of course fishermen never fib....

"Chivita" Dave
 
Now how about a way to deduct my moorage fees...
 
Simple, just refinance the boat for more than you owe to include the extra cash. Or do a "boatequity" loan.... :lol:

charlie
 
No refrigerator is required, nor has it been in at least the last 25 years. Sleeping, cooking, toilet facilities. Not bedroom, kitchen, bathroom.

Your cabin in the mountains only needs the same things: a place to throw your sleeping bag, something to cook on like your coleman stove, and toilet facilities which can be an outhouse or bucket.

-- Chuck
 
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