Tax law change US

[keepondancin]

With the poorly done tax law changes pending in the US eliminating so many deductions for personal tax returns, how will it effect cruisers and hopeful cruisers. First off, the interest deductions for someone taking a loan to buy a boat, which was considered a second home, will be eliminated. What effect will it have on the market? Secondly, there are quite a few people that rely on rentals for income. The State and local tax deductions will also go away. I have rentals in tax heavy New York State which will no longer be deductible, which will increase my taxable income. I am not sure if interest for income properties, when owned in a pass through situation, like privately, S corp, partnership etc, will be allowed. Being single now, my base deduction is cut in half. It seems that this will effect middle income people who want to cruise. It is another step to boat ownership and living out side the box to being more for the wealthy.

[S/V Illusion]

"poorly done tax law"?????

Is this a legitimate post or just politically biased commentary?

The Tax Code hasn't yet been revised. No consensus reconciliation within Congress what the statute would require. And no idea what if any effect it may have. All we can read thus far is politically biased spin.

About the only certainty is that it is likely to be a more business-friendly revision which would benefit the American boat industry in general and us as their consumers.

Stay tuned...

[moctrams]

This is not a political forum.

[jsc7]

The guy probably doesn't know what is even in the plan (since most of Congress doesn't know what is in it either), yet he knows it is "bad". Reminds me of this video:

https://www.youtube.com/watch?v=Ctz_dHfYfb8

[BillsWife1]

Keepondancin,

Nothing is set in stone yet. While tax reform bills have passed both houses, their differences have not yet been reconciled.

However you are operating on outdated information. Here is the current info on state/local, property tax in the two bills currently proposed according to CNN Money.

"Kills state and local income tax deduction, limits property tax break: Today itemizers may deduct their property taxes as well as their state and local income or sales taxes.

The original Senate bill called for a full repeal of the SALT deduction. But it was amended to preserve an itemized deduction for property taxes but only up to $10,000, which is identical to the House measure."

As for mortgage on personal residence:

"Keeps mortgage interest deduction as is: The Senate bill would still let you claim a deduction for the interest you pay on mortgage debt up to $1 million.

The House wants to cap the loan limit at $500,000 for new mortgages.

It disallows interest deductions for home equity loans."

I have not looked at any proposed changes to your Schedule E so can not comment there. As to "poorly" that of course is a matter of personal opinion.
Not knowing your full situation I would say that you will be getting a tax cut under this reform. Your deductions are not likely to significantly change and your marginal tax rate is reduced...doesn't sound "poorly" to me.

[Paul L]

[QUOTE=BillsWife1;2529411...... Your deductions are not likely to significantly change and your marginal tax rate is reduced...doesn't sound "poorly" to me.[/QUOTE]

Interesting criteria. Well written if you get a tax cut and poorly written if you get a tax increase.

Either way, it isn't law yet and still has many changes to be added or snuck in or subtracted

[Island Time O25]

If the corporate rate will go down to 20-22% perhaps that will be the answer to boat ownership. Besides, in these litigious times why would one ever have a potentially liability ladden asset in one's name?

[wincrasher]

Maybe he was referrring to the penmanship of the scribbled notes an the margins of many pages. I think we can all agree that the process thus far has not been ideal, rushed and without due consideration. Media reporting of grumbling Senators shows that the bill was almost entirely written by lobbiests and not Senate staffers, which concerns me greatly.

[danielamartindm]

Originally Posted by keepondancin

With the poorly done tax law changes pending in the US eliminating so many deductions for personal tax returns, how will it effect cruisers and hopeful cruisers. First off, the interest deductions for someone taking a loan to buy a boat, which was considered a second home, will be eliminated. What effect will it have on the market? Secondly, there are quite a few people that rely on rentals for income. The State and local tax deductions will also go away. I have rentals in tax heavy New York State which will no longer be deductible, which will increase my taxable income. I am not sure if interest for income properties, when owned in a pass through situation, like privately, S corp, partnership etc, will be allowed. Being single now, my base deduction is cut in half. It seems that this will effect middle income people who want to cruise. It is another step to boat ownership and living out side the box to being more for the wealthy.

Everyone's tax situation is different. Leftists bore me to tears. Why bring politics here?

[Island Time O25]

Originally Posted by wincrasher

Maybe he was referrring to the penmanship of the scribbled notes an the margins of many pages. I think we can all agree that the process thus far has not been ideal, rushed and without due consideration. Media reporting of grumbling Senators shows that the bill was almost entirely written by lobbiests and not Senate staffers, which concerns me greatly.

That's been Congress' MO for what, 30+ years? Let's just hope that the boating industry lobbyists got their foot in.

[wincrasher]

Originally Posted by Island Time O25

That's been Congress' MO for what, 30+ years? Let's just hope that the boating industry lobbyists got their foot in.

This rush is way outside the norm and should concern all.

[Island Time O25]

Originally Posted by wincrasher

This rush is way outside the norm and should concern all.

How's this different from the rush to ram through Obamacare? IMO it is unfortunately the new normal.

Not to be too political here but the whole idea of lobbying as being as legitimate or more legitimate then plain old voting is what allows this country to slide down the way of banana republics. Any way you look at it - lobbying, any lobbying, is basically nullification of the constituents' votes.

[David M]

Wait for the bill to become law. Then it is worth whining/celebrating/getting political/moaning/and cheering it.

[Island Time O25]

Originally Posted by David M

Wait for the bill to become law. Then it is worth whining/celebrating/getting political/moaning/and cheering it.

Agree as to the content. Disagree as to the process it was or was not deliberated upon. That is quite open to legitimate criticism.

[CarlF]

Talking about the likely tax changes to boats is hardly political. When it comes to tax legislation, it's naive to say "let's wait and see".

Everyone else is calling Congress trying to get goodies for their industry. Nothing against BoatUS, but I don't think their lobbyists get to sit at the lobbyist big-boy table.

At one point, private jet airplane maintenance and services was going to be tax deductible. Why shouldn't we be in there fighting for boatyard bills to be tax deductible?

It seems likely that the new tax bill will be the same - or very close to - the Senate bill just passed. It's doesn't seem to do much to boaters one way or the other. Not likely to make a difference to boat builders either. Except for maybe Brunswick, they are losing money. A lower tax rate isn't going to make a difference.

To take advantage of the slightly lower rates and the S-corp pass through stuff on your boat you have to make an operating PROFIT on your boat. I've never made a profit on my boat but I bet that's going to really hit one or two people hard

As the Senate Bill stands, it looks like minimal impact on boats (second home mortgage still deductible). Losing the tax deductibility of home equity loans will be a problem for some. The state tax deduction imitation to $10,000 isn't likely to hurt many cruisers as most don't make enough to pay $10,000 in state taxes.

Fortunately, I don't think the handwritten changes in this copy of the final Senate bill applied to boats: