Tax Question

[LetsRock]

I have seen various references from people on this board to their boats and their taxes or tax guys. Am I unaware of tax breaks when it comes to owning a boat?

 

[JimT]

As a general statement, if it has a head, a cooktop and sleeping quarters it qualifies as a second home. As such, the interest and personal property taxes are deductible from your federal income tax. See a tax if advisor for more information.

 

[Redhook98]

As a general statement, if it has a head, a cooktop and sleeping quarters it qualifies as a second home. As such, the interest and personal property taxes are deductible from your federal income tax. See a tax if advisor for more information.

Yep! Exactly!! :thumbsup:

 

[LetsRock]

Wow, that is the first I have ever heard of that. Are you required to bring any type of documentation to your accountant (obviously they all are different)?

Yep! Exactly!! :thumbsup:

 

[Redhook98]

Nope, I never have. You just need ot ensure it has a head, cooking area (microwave or stove top) and sleeping quarters. I have been writing off my boats for years now.

 

[LetsRock]

I will obviously ask my accountant but I just purchased a boat with a head, cooktop and sleeping quarters in December and havent even used it yet.

Nope, I never have. You just need ot ensure it has a head, cooking area (microwave or stove top) and sleeping quarters. I have been writing off my boats for years now.

 

[Summer Fun II]

As such, the interest and personal property taxes are deductible from your federal income tax.

Yep :smt001, But if your boat is paid off you get NOTHING in tax breaks. :smt021. I don't get any here in NY . :smt089

 

[LetsRock]

I should have guessed that in NY

Yep, But if your boat is paid off you get NOTHING in tax breaks. :smt021. I don't get any here in NY . :smt089

 

[JimT]

I will obviously ask my accountant but I just purchased a boat with a head, cooktop and sleeping quarters in December and havent even used it yet.

It doesn't matter if you use it or not. Since you can only deduct the interest and taxes you paid in 2009 you may not have a deduction for last year since you just bought the boat in December. For 2010 you should have a full year of interest and taxes to deduct. My finance company sends a year-end statement detailing the interest paid. Bring that and your tax bill to your accountant.

 

[LetsRock]

Thanks JimT, I get the interest issue but are we talking property taxes on my house? How does that come into play?

It doesn't matter if you use it or not. Since you can only deduct the interest and taxes you paid in 2009 you may not have a deduction for last year since you just bought the boat in December. For 2010 you should have a full year of interest and taxes to deduct. My finance company sends a year-end statement detailing the interest paid. Bring that and your tax bill to your accountant.

 

[Henry Boyd]

I don't know about NY, but in Mass we get a personal property tax on the value of the boat. That becomes a federal deduction, like the property tax on you home is.

Henry

 

[Presentation]

If you are a person of significant worth and the boat value justifies the effort, you may wish to discuss estate planning with your financial advisor.

I have heard of people putting their boat in the name of a corporation to skirt inheritance taxes.

Of course you have to die to get any benefit, kind of a bummer.

This is a complex and possibly risky approach to estate planning.

 

[sbw1]

To qualify for the deduction, the mortgage also has to be secured by a lein on the boat. Or it can be a second mortgage on your primary residence (home equity loan) and still be deductible provided certain conditions are met. You should discuss with your accountant.

 

[Mr Salt]

I have seen various references from people on this board to their boats and their taxes or tax guys. Am I unaware of tax breaks when it comes to owning a boat?

Idon't know what you are aware of.:smt021

 

[comsnark]

Talk to your accountant - - > good advice.

If you pay property taxes on a boat. . that is probably deductible.
If you pay interest on a boat, and a boat can be classed as a second home (hence the stove, head, and bed), that is probably deductible.

If you are medium rich and subject to AMT, or to the point where deductions are phased out . . then the deductions are moot.

Talk to your accountant - - > good advice.

 

[Groucho]

Also as I remember you also have to stay on it a certain # of nights.

 

[JimT]

Also as I remember you also have to stay on it a certain # of nights.

There is no minimum number of nights required for the deduction unless the property is a part time rental. For a boat that is not rented out you can take the deduction even if you never sleep on it.

 

[Summer Fun II]

Wrong thread that i meant to post in..... Sorry. :grin: