Like Tree0Likes

Tax question

Reply
Old 01-09-2005, 06:18 PM
  #21
Registered
Trade Score: (1)
 
HiPerf2000's Avatar
 
Join Date: Oct 2000
Location: N.E.
My Boats: Sonic
Posts: 4,072
Default Re: Tax question

Quote:
Originally Posted by hi-perf-2000
Here's a queston,

My house is in my Fiance's name. I have a boat that is financed that would qualify as a second home. I would think i would need a "first" home to write it off ?? or can i still write it off ??

we will be married in April, so i would think i should start being able to write the boat off as a second home come next tax season?? And do we need to get my name officially on the house note ??

thanks, not very knowlegable on how all this works.
Anyone know about this ?
HiPerf2000 is offline  
Reply With Quote
Old 01-09-2005, 06:40 PM
  #22
Registered
Trade Score: (1)
 
Join Date: Feb 2003
Location: Lafayette,La
My Boats: 31 Resin bucket
Posts: 5,335
Default Re: Tax question

hp 2000 , i belive that your social # would have to be on the mortgage to qualify the boat as a second home.
Open72 is offline  
Reply With Quote
Old 01-09-2005, 07:12 PM
  #23
Platinum Member
Platinum Member
 
timewarp's Avatar
 
Join Date: Jun 2001
Location: Silverdale,Washington,USA
My Boats: 2002 Spectre 30,300X's
Posts: 602
Default Re: Tax question

Quote:
Originally Posted by David
http://www.irs.gov/publications/p936/ar02.html
Scroll down the page, maybe 1/8 of the way. Look for the italics noted "Qualified Home"
Qualified Home
For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.
hi-perf-2000,
The way I read this is that you could claim it as your second home even if you don't have a mortgage on a first home, I don't think the mortgage status of your first home would have anything to do with your second home. If your first home was paid off and you didn't have a mortgage on it you still should be able to deduct the interest on a second home. Or if you rent your first home why wouldn't you be able to write off the interest on a second home?

I'd go for it if you have a spot to sleep,cook and poop.Pillow, bic lighter and bucket.

Just my$.02
Caleb
timewarp is offline  
Reply With Quote
Old 01-09-2005, 07:31 PM
  #24
Registered
Trade Score: (1)
 
HiPerf2000's Avatar
 
Join Date: Oct 2000
Location: N.E.
My Boats: Sonic
Posts: 4,072
Default Re: Tax question

I've never received anything in the mail from any bank from which i have financed a boat from in the past. Do i need to call them and get an intrest statement ?

here's another question.... I just bought this boat in May. My old boat (which would also qualify) was also financed, and i sold that in April. So would i need 2 statements ........ 1 from each bank ?? Or can i only claim the new boat ?
HiPerf2000 is offline  
Reply With Quote
Old 01-09-2005, 07:37 PM
  #25
GLH
Platinum Member
Platinum Member
 
GLH's Avatar
 
Join Date: Dec 2002
Location: Burlington, VT
My Boats: Azimut
Posts: 15,267
Default Re: Tax question

Quote:
Originally Posted by 96f350psd
My tax guy is very good. He knows how far to push things before the red flag comes up. He just has not done anything like this before and he is unsure. Hesays he wil do anything I want. Now I'm unsure.............I don't want to risk a big fine or penalty for a lousy few bucks but I want what's coming to me.
The tax people I deal with are VERY familiar with this...
GLH is offline  
Reply With Quote
Old 03-09-2005, 08:23 AM
  #26
Registered
 
tssteph's Avatar
 
Join Date: Oct 2002
Location: Cincinnati, Ohio
My Boats: NOTHING......:)
Posts: 1,477
Default Re: Tax question

Where do you report the interest on the itemized deduction form?

I recall a blank for interest that was not reported on your 1098, is this the correct place?
tssteph is offline  
Reply With Quote
Old 03-09-2005, 08:54 AM
  #27
Platinum Member
Platinum Member
Platinum Member
 
skaterboy's Avatar
 
Join Date: Sep 2004
Location: Colts Neck, NJ
My Boats: 388 Raceboat & 31' Cobra Cat
Posts: 372
Default Re: Tax question

TSSTEPH,

Report the interest on a boat loan the same way or place you report the interest on your primary mtge. Technically you are claiming the Boat Loan as a second residence. Any questions you can call the IRS, they can tell you exactly on your particular situation.
skaterboy is offline  
Reply With Quote
Old 03-09-2005, 09:01 AM
  #28
Registered
 
Join Date: Jul 2004
Location: Palm Harbor, FL
My Boats: Fountain 34CC, Boston Whaler 15 Sport
Posts: 438
Default Re: Tax question

On your schedule A, line 11."Home mortgage interest not reported to you on Form 1098."
Loan Ranger is offline  
Reply With Quote
Old 03-09-2005, 09:02 AM
  #29
Registered
 
Queenie's Avatar
 
Join Date: Nov 2004
Location: Fairport Harbor OH
Posts: 2,423
Default Re: Tax question

Quote:
Originally Posted by HiPerf2000
I've never received anything in the mail from any bank from which i have financed a boat from in the past. Do i need to call them and get an intrest statement ?

here's another question.... I just bought this boat in May. My old boat (which would also qualify) was also financed, and i sold that in April. So would i need 2 statements ........ 1 from each bank ?? Or can i only claim the new boat ?
We claim interest on our boat every year and our tax person never says anything. They do not send out interest paid forms on boats in Ohio, so we call every year to get the interest paid, so if you receive nothing in the mail I would call your bank.

You should be able to claim both boats. If it sold a house last year and bought a new one, you'd claim interest on both (at least we did last year).
Queenie is offline  
Reply With Quote
Old 03-09-2005, 09:06 AM
  #30
Registered
 
Join Date: Jul 2004
Location: Palm Harbor, FL
My Boats: Fountain 34CC, Boston Whaler 15 Sport
Posts: 438
Default Re: Tax question

Tax deductibility of interest on 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.

Borrowing against your unencumbered home has limitations
Home mortgage interest deduction is limited to interest paid on mortgage debt used to purchase or improve a residence, or to refinance the remaining balance on a purchase or improvement. If the money isn't used for the home, the interest expense does not qualify for the deduction.

So does a home equity loan
Home mortgage interest deduction is limited to interest paid on home equity loans up to $100,000. By using a home equity loan, you may limit the amount of interest that is deductible, if your boat loan balance exceeds $100,000.

Second home mortgage interest deduction is limited to interest paid on second homes that are secured by that second home. You would need to have a written collateral agreement (security agreement) indicating the boat as collateral.

The preceding information was prepared by Deloitte & Touche, LLP
Loan Ranger is offline  
Reply With Quote
Reply

Related Topics
Thread
Thread Starter
Forum
Replies
Last Post
mikesufka
General Boating Discussion
25
10-27-2006 01:59 PM
Tantrum
General Boating Discussion
10
04-28-2006 04:08 PM
Sick Nordic
General Boating Discussion
11
03-15-2006 06:57 AM
Smitty
General Boating Discussion
14
10-22-2004 08:52 PM



Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On



All times are GMT -5. The time now is 05:26 PM.


Copyright 2011 OffShoreOnly. All rights reserved.