MacGregorSailors.com

I was interested to learn about boat tax deductability

http://www.discoverboating.com/buying/f ... educt.aspx

or, if you let it be used as a charter - then the expense is also deductable.

The interest part is fine, as long as you only have one other home. On the charter, or other business use, please be aware of the recapture results hen disposing of an asset. Personally, I think it a bad idea to finance toys.

~Rich

Make that 2 of us..

Hamin' X wrote:. Personally, I think it a bad idea to finance toys.~Rich

I actually do use my boat as a second home but I do not deduct the interest just because I really don't think those types of loopholes should exist. Great if the boat is part of your income stream via charter or some other way.
I wonder how many times you would have to charter the boat per year to qualify for that type of deduction?
If I bare boated it for a week is that enough to write everything off?

Although over use of financing might have damaged the economy, I don't think it's a problem to use it to buy whatever you feel like. It's the factional reserve system that lets banks make money out if thin air that is a problem.
Personally I tend to pi$$ money away on hobbies etc so a payment on a car or boat is a sort an enforced savings policy.
When the x came out, the cost was 15,900 or something. Ten years later the M was 21,900 or something.
So if I started saving each month for the next model (hypothetically) I would have to save for the projected price perhaps 25 % more then it is now assuming a modest amount is placed in a CD or other no risk vehicle.
Not to mention I would then be ten years older. So much for sailing with the kids or worse yet grand kids.
You've just lost a priceless experience in the name of paying in cash and saving interest. Its also very easy for a big lump sum such as a boat fund to get diverted for things like a new couch, draperies or appliances. Don't think too many "Admirals" are going to let 20,000 in a non essential fund go un noticed.
And if you die eight years into your financial project, your heirs get a nice chunk of change.
Screw that noise. Unless your still really young I would say finance the crp out of it if you think you can make the payments comfortably and have made allowances for rough patches in the economy at large. You can't buy back that time later.

Ixneigh

The rule for writing off expenses appears to be claiming 14 overnights. Several articles make the point that the IRS does not check your records. As long as the boat has a bed and a bathroom it qualifies. I may look into this - I have a second home already.

Also agree about "opportunity cost" - my Mac's monthly interest on a 3 year loan is $148 a month. That not much higher than my cell phone bill.

Ixneigh wrote:I actually do use my boat as a second home but I do not deduct the interest just because I really don't think those types of loopholes should exist. Great if the boat is part of your income stream via charter or some other way.
I wonder how many times you would have to charter the boat per year to qualify for that type of deduction?
If I bare boated it for a week is that enough to write everything off?

Ixneigh

Careful gentlemen... Its a slippery slope... You rent it for 14 days but its Available to you for the rest of the time..?? Its worked in Most Cases.. Off Percentages..It can get pretty nasty.. Now its income property..Humm another can of worms..Just one of those worms is ? Are you insuring it as a rental? Another is when you sell it.. humm it was income property..
I had, an acquaintance who was an IRS Corporate Auditor.. We meet on Cozumel were we both owned Vacation homes.. We became of sort? Drinking Buddies.. Humm are you all aware that Department of Motor Vehicle Records is a Flag tosser? To keep this simple.. Your Claimed Income Zip Code and DMV records better coincide.. Its all done by computer models.. if you dont fall within the model? The Flags start poping up.. and if enough flags pop ? Your the winner!!! Of An AUDIT!

We bought a Bayliner cabin cruiser new in 2000 , we used it as a second home and deducted the interest thruout the life of the loan.
Some may consider it unwise to finance toys , but thats the only way middle class people will ever own them . AND the middle class buying toys is good for the economy .

I believe it's doable if you are claiming your boat as a second home. I'm not an accountant, but I've heard if the boat has a kitchen (place to cook) and a bathroom (place to potty) it can be considered a second home. Most Macs fit this description.

http://www.irs.gov/publications/p936/ar02.html

Talk with your tax adviser.

I bought my with a line of credit against the house and then rolled both mortgages into a refinance at a low interest rate. It does not bother me at all that the interest is deductible.

Rob, for sure.... that's the Safest Easiest way to do it.. Though I and others would just rather buy with cash.. It works for us.. All My Toys and both my vacation homes were cash purchases..I have several freinds on Cozumel who bought bigger nicer and on credit.. all are now experiencing $$$ issues..All Were counting on rental income ( actually Illegal Rental Income long story...) to pay the loan.. Guess what? Tourism has dropped wayyyyyyy off even for a place as inexpensive as Cozumel is , to visit..on Vacation..

RobertB wrote:I bought my with a line of credit against the house and then rolled both mortgages into a refinance at a low interest rate. It does not bother me at all that the interest is deductible.

Gypsy Life wrote:We bought a Bayliner cabin cruiser new in 2000 , we used it as a second home and deducted the interest thruout the life of the loan.
Some may consider it unwise to finance toys , but thats the only way middle class people will ever own them . AND the middle class buying toys is good for the economy .

I agree with this philosophy I bought my 2006M at Xmas 2005 and had it in a slip in Marina Del Rey until the middle of 2008 when we moved to Mexico (mistake). For those 2 1/2 years I sailed almost every day I was there (five days a week) and then played poker at night somewhere around LA. I used the boat like a hotel room and more than the interest on the boat was deductible - - - it was a second home. Had I not owned the boat, I would have been in hotel and motel rooms every week - - - and they would have been totally deductible. ALso, the boat was a much SAFER place to sleep and stay than motel rooms I was never offered any hard drugs in the marina - - - only sex and alcohol - - - and I don't drink much

Rick

pokerrick1 wrote:

Gypsy Life wrote:We bought a Bayliner cabin cruiser new in 2000 , we used it as a second home and deducted the interest thruout the life of the loan.
Some may consider it unwise to finance toys , but thats the only way middle class people will ever own them . AND the middle class buying toys is good for the economy .

I agree with this philosophy I bought my 2006M at Xmas 2005 and had it in a slip in Marina Del Rey until the middle of 2008 when we moved to Mexico (mistake). For those 2 1/2 years I sailed almost every day I was there (five days a week) and then played poker at night somewhere around LA. I used the boat like a hotel room and more than the interest on the boat was deductible - - - it was a second home. Had I not owned the boat, I would have been in hotel and motel rooms every week - - - and they would have been totally deductible. ALso, the boat was a much SAFER place to sleep and stay than motel rooms I was never offered any hard drugs in the marina - - - only sex and alcohol - - - and I don't drink much



Rick

I guess if its okay for Mitt to find enough deductions to only pay 15% on his millions it ought to be okay for a working class person to deduct a few thousand in interest , on a vacation home !

You are confusing capital gains taxes with income taxes. Horses of different color.

~Rich

Yep there is a difference... Very Very Very Very Dicey......

Hamin' X wrote:You are confusng capital gains taxes with income taxes. Horses of different color.

~Rich

IMHO Gentleman.. Talk to your CPA.Do It Right... Free Advice off the Internet, is really only worth about that much if your ever held accountable..
Lots of misinformation on the Net about "Tax Laws"... Just one quick one.. You can go back 5 years and make amendments / changes in your favor..
HAHAHAHA !!!They can use an option / loop hole that could allow them to go back to the first filing you ever made , and even before than time.. JSYK