Second Home?
- Thread starter Kper
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"Qualified Home
For you to take a home mortgage interest de-duction, your debt must be secured by a quali-fied home. This means your main home or your second home. A home includes a house, con-dominium, cooperative, mobile home, house trailer, boat, or similar property that has sleep-ing, cooking, and toilet facilities.
The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. Otherwise, it is consid-ered personal interest and is not deductible.Main home. You can have only one main home at any one time. This is the home where you ordinarily live most of the time.Second home. A second home is a home that you choose to treat as your second home.Second home not rented out. If you have a second home that you do not hold out for rent or resale to others at any time during the year, you can treat it as a qualified home. You do not have to use the home during the year."
For you to take a home mortgage interest de-duction, your debt must be secured by a quali-fied home. This means your main home or your second home. A home includes a house, con-dominium, cooperative, mobile home, house trailer, boat, or similar property that has sleep-ing, cooking, and toilet facilities.
The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. Otherwise, it is consid-ered personal interest and is not deductible.Main home. You can have only one main home at any one time. This is the home where you ordinarily live most of the time.Second home. A second home is a home that you choose to treat as your second home.Second home not rented out. If you have a second home that you do not hold out for rent or resale to others at any time during the year, you can treat it as a qualified home. You do not have to use the home during the year."
We did deduct our boat loan for about 10 years with no issues. Our accountant was very careful about red flags.
As a second home; it must have cooking, sleeping and bath facilities to qualify. Some small boat builders added a tiny alch stove just to qualify for the deduction
As a second home; it must have cooking, sleeping and bath facilities to qualify. Some small boat builders added a tiny alch stove just to qualify for the deduction
IRS rules allow interest deductions on boats used as a second home. However, unless you use it as such and can document such use, it may not be worth the risk of an audit especially if the interest $$$ value is low. As always with tax questions, it's better to ask your accountant than a bunch of strangers on the Internet.
Don S/V ILLusion; As always with tax questions, it's better to ask your accountant than a bunch of strangers on the Internet.
I hear ya on that one but isn't that kinda what we do here?... Throw questions out to get some feedback, sometimes to determine if it's worth pursuing? You are correct however.
As far as worrying about an audit, I figure if it's all legal and on the up-and-up then I wouldn't worry about doing it. I'll have to say at this point, based on the fact that we don't use it as a second home, we'll probably pass on claiming it as a second home. Thanks everyone.
I hear ya on that one but isn't that kinda what we do here?... Throw questions out to get some feedback, sometimes to determine if it's worth pursuing? You are correct however.
As far as worrying about an audit, I figure if it's all legal and on the up-and-up then I wouldn't worry about doing it. I'll have to say at this point, based on the fact that we don't use it as a second home, we'll probably pass on claiming it as a second home. Thanks everyone.
Been doing it for 35 years.
What's the issue?
"Boat" does NOT initiate anything. BS.
It's legal, given the stipulations: head, berth, stove and "warm honey."
Use it.
Oh, "warm honey" isn't in the rules???
Why not?
What's the issue?
"Boat" does NOT initiate anything. BS.
It's legal, given the stipulations: head, berth, stove and "warm honey."
Use it.
Oh, "warm honey" isn't in the rules???
Why not?
If you had a purchase money lien on the boat you could deduct the interest. It could also qualify for investment in some energy efficient appliances and other home benefits. I think Don is providing fair warning. The IRS might look a little closer when tax loopholes are used to help maintain boats so unless your deduction is significant I would not bother.
Check into local rent laws also. In Massachusetts there are ways to include a portion of your rent. This can used for slip fees.
A buck's still a buck where I come from.
Better in MY pocket.
What's so hard?
It's perfectly legal, based on the written rules.
You don't put the word "boat" on the tax form. You use the 1099 form from the mortgage company that you paid the interest to.
In post 2, Weinie did not give us the source of his post, but any IRS booklet on mortgage interest will have the same rules spelled out for all you nay-sayers. UPDATE- th pdf finally downloaded. It is the IRS publication, Read it for yourselves, folks. Thanks Weinie.
I'm speculationg on this, but if it qualifies as a second home, you don't have to actually live on it (because you still live on your main home), but, you do use it and sleep/eat/cook on it, don't you? Even if it never leaves the slip.
He's right that you COULD, if your cirmstances meet the test, but if you can't itemized (interest paid), then you can't do it anyway.
Actually we are claiming a tax credit for the solar panel and wind generator we installed last year. 30% of installed cost (including labor). IRS rules specifically allow it for boats that are homes whether primary or secondary
Exactly. What. Stu. Said.Been doing it for 35 years.
What's the issue?
"Boat" does NOT initiate anything. BS.
It's legal, given the stipulations: head, berth, stove and "warm honey."
Use it.
Oh, "warm honey" isn't in the rules???
Why not?
Perhaps if you show substantial business losses over several years with no income but show large interest deductions, that might, I would suspect trigger a red flag.
But the .gov is giving you money here. (well, letting you keep your own money, really).
So why not take it?
Therein lies the issue. You need an address of the second home, not a marina address, a mooring or a driveway trailer. Minimizing taxes is fine. Avoiding taxes isn't.
yeah well, I've been deducting the interest on my boat for years, been through an audit, didn't have a formal 1099 and it was not a problem for the IRS. And no, you do not need to provide an address for the boat because, you know, by definition, it moves around