Boat Financing Tip: “Second Home” Benefit
March 16, 2016
Can your boat qualify as a second home, thereby resulting in a tax deduction on the interest paid on your boat loan? According to the team at Sterling Associates, one of the nation’s leading boat-financing company, the answer is a resounding “yes!”
Under current (2015) U.S. tax rules, a taxpayer may deduct interest on a principal residence and one other residence owned by the taxpayer for the purpose of deductibility for the tax year. A boat can qualify as a second residence if it provides basic living accommodations such as sleeping space (berth), a toilet (head), and cooking facilities (galley). If the boat is chartered, the owner will have had 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).