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Old 04-08-2016, 08:46   #1
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Declaring a boat as your primary residence?

In the US, you apparently can declare a boat or a recreational vehicle as your primary residence, provided that it have permanently-installed cooking, sleeping, and toilet facilities.

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

Has anyone here tried to do this, and have any advice to share?
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Old 04-08-2016, 09:01   #2
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Re: Declaring a boat as your primary residence?

"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.
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Old 04-08-2016, 09:32   #3
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Re: Declaring a boat as your primary residence?

It doesn't need to be a primary residence. It can be declared as a secondary residence as well. I wouldn't consider that a tax 'consequence', but rather a tax 'benefit'.

The interest on the loan is what is tax deductible.

I would discuss with your tax preparer.
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Old 04-08-2016, 09:34   #4
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Re: Declaring a boat as your primary residence?

The above is true. Just need a boat with a few basic amenities.

In order for the interest to be deductible, the loan must be secured by the boat. I would think this is the case for most purchases of newer boats, but maybe not.

Capital gains? HA!
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Old 04-08-2016, 09:37   #5
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Re: Declaring a boat as your primary residence?

If it is your primary residence, you can claim a homestead exemption for property taxes too. In the legal description, just put the boats description and HIN and marina slip where it lays. Helps a bit with the taxes too.
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Old 04-08-2016, 09:53   #6
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Re: Declaring a boat as your primary residence?

Homestead is on a State by State basis. It also doesn't necessarily apply to property taxes in all states (obviously in your state it does). Neither the state I live in, nor the state my boat is registered in levy a property tax on boats to begin with.

https://en.wikipedia.org/wiki/Homestead_exemption
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Old 04-08-2016, 09:58   #7
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Re: Declaring a boat as your primary residence?

Do some states charge real property taxes on boats?

Note that you can only deduct interest on your "first" vacation home (I think). I think there is also some maximum amount of the total mortgages for your principal residence and the vacation house.
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Old 04-08-2016, 10:00   #8
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Re: Declaring a boat as your primary residence?

I don't think you need to worry about the capital gains tax exclusion with a boat. When you get around to selling it, the odds of it being worth more than what you originally paid for it are pretty much nil.
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Old 04-08-2016, 10:10   #9
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Re: Declaring a boat as your primary residence?

You have to spend at least 30 days a year on the boat.
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Old 05-08-2016, 08:40   #10
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Re: Declaring a boat as your primary residence?

I live in SC USA, last week I registered my Rival 32 sailboat as my primary residence in my county. The property tax is now figured on 4% of the value (please note that the tax is not 4%, it is figured on 4%). My county does not have a tax category for "live a boards", so my boat is listed as a "Mobile Home", I even have a little Mobile Home sticker that goes in my port window that shows I've paid my county tax for that year, LOL. Long story short, my property tax is ~100 greenbacks each year. Also, I own the boat outright. Hope this helps.
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Old 05-08-2016, 08:43   #11
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Re: Declaring a boat as your primary residence?

Quote:
Originally Posted by Jdege View Post
In the US, you apparently can declare a boat or a recreational vehicle as your primary residence, provided that it have permanently-installed cooking, sleeping, and toilet facilities.

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

Has anyone here tried to do this, and have any advice to share?
You also can declare it your secondary residence, like a second home and write off the interest on the boat loan and any property taxes your local jurisdiction places on it. Rule of thumb is 26 feet or larger, enclosed cabin, and suitable for living aboard. IRS not fussy about toilets etc. Just so the boat provides living accommodations.
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Old 05-08-2016, 08:54   #12
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Re: Declaring a boat as your primary residence?

I'm going through this right now with the Oregon department of ridiculous (revenue)
I purchased my boat four years ago, documented it with USCG, registered it in Oregon, moved it to Washington, moved aboard, got a job in Washington, live in Washington. now that makes me a Washingtonian... Not according to Oregon. They sent me a tax bill for $5000.00+ because they still consider me a resident... fun times...NOT!!!
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Old 05-08-2016, 09:07   #13
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Re: Declaring a boat as your primary residence?

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Originally Posted by artisanmach View Post
I'm going through this right now with the Oregon department of ridiculous (revenue)
I purchased my boat four years ago, documented it with USCG, registered it in Oregon, moved it to Washington, moved aboard, got a job in Washington, live in Washington. now that makes me a Washingtonian... Not according to Oregon. They sent me a tax bill for $5000.00+ because they still consider me a resident... fun times...NOT!!!
You do realize you are supposed to transfer registration to Washington after 90 days residency.
On another front if you declare your boat as a primary or secondary residence you also qualify for alternative energy credits if you choose to install solar panels to charge your house batteries.
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Old 05-08-2016, 09:30   #14
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Re: Declaring a boat as your primary residence?

Home mortgage interest is deductible only if you are itemizing verses taking the standard deduction.
If you work as a writer or consultant on the boat you may also be entitled to a home office deduction. Which may also include an allocable potion of all of your boat expenses.
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Old 05-08-2016, 09:40   #15
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Re: Declaring a boat as your primary residence?

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.
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