View Full Version : tax benefits from boat with a head?
jdl xstar
05-05-2009, 04:18 PM
So i've been hearing you can treat any boat with a head such as an X55 or X80 as a second home for tax deduction purposes. Anyone have experience with this or any CPAs out there who can shed some light on this? I'm not in the market for either but just curious more than anything.
flipper
05-05-2009, 04:19 PM
I was told by my CPA a while ago it had to have a head, and a kitchen.
jdl xstar
05-05-2009, 04:22 PM
interesting... makes sense that it would need both to qualify. I could've sworn some boat show guy was saying all you need was a head, but I'm sure he would've said anything to move some product.
Sodar
05-05-2009, 04:23 PM
All you need is a head and a sink for it to be considered. The "myth" is entirely true and can be done. My parents did it several times for a write off.
jdl xstar
05-05-2009, 04:26 PM
Nice- who's the IRS to say that a sink isn't a kitchen for some folks!
flipper
05-05-2009, 04:27 PM
Can the head be the teak, and the sink be the hot shower?:D
jdl xstar
05-05-2009, 04:28 PM
Ha! the entire lake is my bathroom!
denverd1
05-05-2009, 04:30 PM
Haha!! I like where your "heads" are! Right off the back of the boat!!
So i've been hearing you can treat any boat with a head such as an X55 or X80 as a second home for tax deduction purposes. Anyone have experience with this or any CPAs out there who can shed some light on this? I'm not in the market for either but just curious more than anything.
And it has to be a reasonable size. Trying to claim a 17' runabout will probably be met with "KILL HIM!" from the IRS.
bobx1
05-05-2009, 05:24 PM
"Now, before you get your hopes too high, the boat must "reasonably" be livable — your 15-foot jet boat doesn't qualify. The IRS has generally determined, however, that any boat that has at least one berth, a permanent galley, and a head (even if it's just a Porta-Potti) qualifies for the second home deduction.
There are some caveats here that you need to remember. Obviously, you can't already have a second home you are deducting. If you do, you can choose between the second home and the boat each year for your deduction."
source = http://www.boats.com/news-reviews/article/tax-breaks-for-boaters
and another:
"According to 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. A qualified residence must have basic living accommodations including sleeping space (berth), a toilet (head), and cooking facilities (galley). If the boat is also chartered, 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, to qualify for the interest deduction in accordance with IRC section 280A(d)(1). "
source = http://www.discoverboating.com/buying/financing/taxdeduct.aspx