Tax Time? Loan Interest Deduction - IRS

Michael T

I brought this up on another thread and thought maybe I should raise it here too. Now that tax time is near just a friendly reminder for guys who own cruisers. If you have a fixed head, cooking, capability and sleeping capability you can deduct the interest on a loan to finance it. There may be more details but it is a great advantage. Steve (Handymans 342) confirmed this and mentioned his wife is a tax accountant.  I believe he said he might post the IRS rule number? Anyway, I can't (boo hoo) as my government is too cheap but to any of you who can - lucky you!

Black_Diamond

True. As long as you itemize. 

craigswardmtb

I posted in the other thread as well but keep in mind it is essentially being classified as a second home. So if you have a second home and you deduct it's interest than you could not also deduct the boat loans interest.

I have a bad feeling an audit is coming my way this year.  Between homes, investments, new line of credit, a new w2, and a solar credit I'm getting close to 30k back. I'm pretty sure they don't like cutting those checks....

Hamdog

My boat is on a home equity line of credit so is already deductible.

[Deleted User]

I deduct my boating expenses under "gambling losses"
Andy

mattie

We can do something similar up here in Canada. Use a portion of our boat expenses as 'entertainment' for clients under business deductions.

That said, I don't bother....it's an extra layer of complexity on the tax return. Could easily be disputed.

Also, as a 2nd home - interest rates are so low now, the annual interest expense may not justify the increased scrutiny.

my 2 cents.

mattie

Looks like Hamdog has the simplest solution above.

JoeStang

Yeah I get to deduct the interest on the loan, even for my little 276 since it has a sink, toilet, and sleeping area. It doesnt make a HUGE difference though, since I got a very good rate and its a 15 year loan. I think it was like $3-400 more than without that deduction.

craigswardmtb

mattie said:

Looks like Hamdog has the simplest solution above.

Yes but keep in mind if you default you now collateralized with your house. Some aren't comfortable with that. 

randy56

Never had a boat pmt. and probley will never have 310,342,360, well maybe.

craigswardmtb

randy56 said:

Never had a boat pmt. and probley will never have 310,342,360, well maybe.

Head up to Canada with a wad of Benjamin's and I bet you could find a nice 360 for 70k usd or so. 

Michael T

Too funny, maybe a 360 sea ray!

chamberb

Thanks for the tip MT!!