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View Full Version : Let IRS help you with your boat payments



Last Tango
01-08-2007, 01:11 PM
Well, with the new year here, it seemed important to mention taxes at this time.
Here in Florida, State sales taxes are fully deductible including the purchase of high dollar items like cars and boats. Donzi Quixote ('06 22ZX) was purchased new in 2006, so I will be allowed to add an addition whole bunch of money to my deduction line for Florida State Sales Tax.
Additionally, the interest on my loan payment will also be fully tax deductible. The rules for deductibility require that the vessel have sleeping quarters (I have a V-berth in the cuddy area for 2), there be toilet facilities (I have the factory Porta-potty option), and that there be cooking facilities (I have an electric hot plate and inverter, for coffee and other hot foods and can carry water for over-nighters). These are the major requirements for the Second Home deduction under the IRS code.
If you are using the boat as a business deduction in some fashion, you have to spend a minimum of 14 days/nights aboard the boat per year to qualify for a business deduction. There is no similar requirement if you are simply using it for your own personal recreation.
As always, check with YOUR tax advisor before you file for either deduction. And sales tax deductions vary widely from State to State.

Getting a new Classic to quailfy could be a challenge. All of the ZX, ZR, and most ZF boats have the necessary items already. The smaller ZF's have the same problem as the Classic's - no sleeping quarters.
Be creative and you can save yourself some serious money.

This deduction has been looked at by Congress several times, and every attempt to rid the IRS Code of this tax loophole has been thoroughly dashed in the early stages. Every Congressman and Senator has at least two homes, one in Washington and the other in their home district. Most of our Legislators and Judiciary have boats, vacation homes, and RV's for the campaign trail. The IRS is way too overburdened and understaffed to check your boat for qualifications. Nor do they care. Additionally, the luxury boat manufacturers have an extremely large and very powerful lobby in Washington to ensure the deduction remains in place. Nobody wants to shoot themselves in the foot.
Also, some States have special taxes on boat fuel and this may also be deductible in certain circumstances. Again, check with YOUR tax advisor first before using this particular deduction.