Declaring a boat as your primary residence?

[sailorchic34]

Originally Posted by artisanmach

it's complicated because the boat is co-owned with my girlfriend who still lives in Oregon.
it shouldn't matter where the boat is registered. I made no revenue in Oregon and was living in Washington.

If the boat is still registered and or titled in Oregon and you did not register or title in Washington, then you do have a tax bill for Oregon. No it's not fair, but that is how it is.

Same thing in California. A boat registered in California that is out of the country for years still has property tax owned to the county in california and they WILL put a lien on the boat.

[Mango51]

Example only. You buy a sailboat in auction $35,000. You invest $40,000. You sell for $125,000. You would only pay tax on $50,000. What percentag of the 50 are you responsible for?

[denverd0n]

Originally Posted by Mango51

Example only. You buy a sailboat in auction $35,000. You invest $40,000. You sell for $125,000. You would only pay tax on $50,000. What percentag of the 50 are you responsible for?

You would list the whole $50k as capital gain. What exactly you have to pay depends on your tax bracket.

Of course, a far more common scenario is...You buy a sailboat in auction $35,000. You invest $40,000. You sell for $55,000. No income tax liability, because there is no capital gain.

[Jdege]

Originally Posted by denverd0n

Of course, a far more common scenario is...You buy a sailboat in auction $35,000. You invest $40,000. You sell for $55,000. No income tax liability, because there is no capital gain.

But can you use the capital loss to offset other profits?

[Sandero]

Originally Posted by TacomaSailor

"This can have some tax consequences (tax-deductible interest payments, a $250,000 capital gains exclusion, etc."


IRS Pub 936 https://www.irs.gov/publications/p936/ar02.html

Just list the interest payment on your Schedule A and provide the Form 1098 from the financial institution to whom you pay interest. You do not have to prove that the boat/interest payment is deductible at the time you file your tax return. But, if you are audited you had better have the necessary documentation.

You are indeed a fortunate boat owner if you sell your boat for a taxable gain. It has not been my experience that boats appreciate as do most homes on land.

I did this and IRS denied the deduction... I have refused to pay the taxes for 20 years.. the mortgage is paid off back in the late 90s.

[Schooner Chandlery]

Originally Posted by Sandero

I did this and IRS denied the deduction... I have refused to pay the taxes for 20 years.. the mortgage is paid off back in the late 90s.

They probably attributed the money you put into the boat as "maintenance" rather than capital improvements.


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[Sandero]

Originally Posted by Schooner Chandlery

They probably attributed the money you put into the boat as "maintenance" rather than capital improvements.


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I didn't itemize the money I put in... I tried to deduct the interest on the mortgage.... which was half the purchase price.

[newhaul]

Originally Posted by sailorchic34

If the boat is still registered and or titled in Oregon and you did not register or title in Washington, then you do have a tax bill for Oregon. No it's not fair, but that is how it is.

Same thing in California. A boat registered in California that is out of the country for years still has property tax owned to the county in california and they WILL put a lien on the boat.

That's a nice thing here in Washington I pay my 30.25 each year for my tags and that's all. No property taxes.

[RickG]

Taxes in accounting are like friction in physics, life is simple without them.

We sold our house in June, buying our liveaboard this year and moving aboard full time next year. So, we get to shelter our carryover investment from the sale of our house to the boat and deduct interest and expenses on any financing.

That's just a warm up.

We'll register the boat in Florida to get our residency there, but live aboard in Maryland for more than 90 days. Maryland is a harsh mistress, excise tax is due after 90 days cumulative in Maryland waters. No Florida sales/use tax is due since we will not bring the boat into Florida for the first six months we own her. We may buy the boat in Virginia. No Maryland income tax for us because we'll be out of state the majority of the year. Florida has no state income tax. Our first full year of owning the boat we'll do the ICW to at least Georgia.

Who do I pay?

Cheers, RickG

[Dsanduril]

Originally Posted by RickG

Who do I pay?

Why everyone, of course. Anything less would be too good to be true

[yachtcowboy]

If you paid WA income tax, oops no income tax in WA. If you had a slip that you paid rent to a marina that might help with the Peoplws Republic of OR.
Did you change your DL license to WA, that might help as well. OR is pretty serious about collecting taxes, got to pay for that climate change.

[GoingWalkabout]

OK. A question. And please don't attack me for looking at ways to legally minimise my taxes.

If I draw up a loan note with a member of the family that has no income and pay interest to that person ( for structuring it could be a number of non income earners in an LLC) . Now I deduct the interest payment as either a first or second home. Is this workable under IRS rules?

[newhaul]

Originally Posted by Going Walkabout

OK. A question. And please don't attack me for looking at ways to legally minimise my taxes.

If I draw up a loan note with a member of the family that has no income and pay interest to that person ( for structuring it could be a number of non income earners in an LLC) . Now I deduct the interest payment as either a first or second home. Is this workable under IRS rules?

For something this specific and with the possible ramifications I would recommend consulting with a tax attorney .

[GoingWalkabout]

Originally Posted by newhaul

For something this specific and with the possible ramifications I would recommend consulting with a tax attorney .

No privileged communication between client and tax attorney regarding tax if the Government wants to call it evasion. No. Group sourced anonymous opinions can be safer.

[Cheechako]

Originally Posted by Mango51

Example only. You buy a sailboat in auction $35,000. You invest $40,000. You sell for $125,000. You would only pay tax on $50,000. What percentag of the 50 are you responsible for?

None. Ask forgiveness later if necessary.