Tax-Time Tip: Boats Qualify as Second Home

As the 2000 income tax return filing deadline approaches, boat owners should remember that interest paid on a secured boat loan is tax-deductible as long as the boat meets the Internal Revenue Service (IRS) criteria for a second home, said the 515,000-member Boat Owners Association of The United States (BoatU.S.)

"For tax purposes, many boats are used and qualify as second homes just like land-based vacation condos and mobile homes," said Elaine Dickinson of BoatU.S. Government Affairs. The IRS defines a second home as having "basic living accommodations such as sleeping space, toilet and cooking facilities." A secured loan is one where a lending institution holds the boat as collateral for the loan.

Interest paid on the loan should be reported on the federal income tax return Form 1040, Schedule A, Itemized Deductions. Boat owners who received a 1098 form from their bank should enter the amount of interest paid on line 10. If they did not receive a 1098 form, they should enter the amount on line 11 and provide the lender's name, address and tax identification number. For more specific tax information, boat owners should consult their own financial or tax advisors.

Founded in 1966, BoatU.S. is the largest organization of recreational boaters in the world. BoatU.S. is an advocate for marine safety and the environment, conducts tests and reports on boating safety equipment and offers its members a wide array of consumer services. These include group-rate marine insurance; boat loans; on-the-water towing reimbursement; discounts on boating gear, marine fuel and marina services; and a subscription to BOAT/U.S. Magazine, the most widely read boating publication in the U.S.

Posted: 3-1-2001