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You can definitely claim the boat as a second home if it has a head, cooking facilities, sleeping facilities, and Bathing facilities and the loan is secured by the boat. You can't take a second mortgage out on your residence and take this deduction. Turbo tax does not handle it well and tries to put it on the line for a mortgage with a 1099 and it needs to go on the next line. It is likely that your lender will not give you a 1099 because as mine put it " we have no way of telling if a boat qualifies as a second home" so they treat it as a consumer loan. I have just requested a written statement of interest from them every year, which the customer service department is happy to give me. This deduction seems to be a red flag with the IRS for an audit trigger. They sent me a bill for $12000 and change plus interest. I sent them a statement with copies of my USCG documentation (proving I am the registered owner of the boat), a copy of my mortgage agreement, and photographs of the required facilities. About a month later they sent me a letter stating that they were satisfied with the evidence I presented and that they considered the matter settled with no money due. Keep in mind that this is my personal experience, not legal tax advice. You should consult an accoutant or tax attorney.
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