Claim Yourself as a Liveaboard? - & Tax Question

[Hud3]

Originally Posted by grunzster

I don't own a house, so what about as a first home?

Here's what the IRS says about it in their rules (excerpt)...

Qualified Home

For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities....


Main home. You can have only one main home at any one time. This is the home where you ordinarily live most of the time.
Second home. A second home is a home that you choose to treat as your second home.

Source: IRS Publication 936

[BlueSovereign]

Originally Posted by Hud3

When I recently renewed my T.L. Dallas insurance policy, one of the questions on the renewal questionnaire was, "Is this boat your full-time residence?" I can only assume that the policy premium would be affected one way or the other by the answer to that question, but I'm not sure how.

I can tell you how it will increase your insurance premium in NZ: It will increase it! ... I know that for fact!

[Hampus]

Wow! I thought it was getting bad here but now I just feel sorry for you... I pay $500 a year for insuring our 41 ft ketch. Neither the insurance company nor the "IRS" then gives a damn what I do or where I live. I guess I shouldn't complain.

Sorry, this wasn't helping, but maybe you should come live here

/Hampus

[windsaloft]

We found out early on that the insurance company very much wants to know if you are a liveaboard or not -- and when you read your policy through (and wow do you want to do that!), it is a bummer to discover after you bought it and already paid an "earned" premium. My advice -- find a good broker and work with them, honestly, to get what you need. Insurance companies don't want to make payments, and if you give them an easy out by being in clear violation, they'll take it.

I'll give my personal endorsement of my broker if you PM me -- they are on this forum, but I don't want to break the advertising rules. Frankly, the coaching and advice provided by them has ensured that I have sidestepped a number of traps, and know what to expect for different circumstances. I am not an overall fan of insurance, but am a staunch fan of my current boat insurance broker b/c I get what I need and understand the limitations, etc.

Lastly -- I do claim my boat on my local taxes for a homestead exemption -- it helps a little. Regarding federal taxes -- I paid the good accountant $80 for a thorough consultation to do it right --- and saved a lot more than that! Generally, I am a do it yourselfer, but have learned that with insurance and taxes and such, paying a good consultant repays in spades.

[off-the-grid]

Oops, forgot to update.

Talked to my insurance a few weeks ago, BoatUS. According to them, there's no such thing as a live aboard. They could care less if you live aboard full time, part time, or not at all. Care less to the point of not even wanting or needing to make a note on my policy stating that I'm a live aboard.

[GordMay]

Maritime General Agency of Westbrook, Conn., launched a new program for liveaboard boats and yachts. MGA's Liveaboard Yacht Coverage Endorsement will be attached to the firm's New Hampshire Insurance Company Yacht Policy. The endorsement adds coverage for personal property, personal liability and additional medical payments, while retaining the coverage already afforded by the yacht policy. "This product responds to the demand of our brokers for a solution to this difficult-to-place segment of the yacht market," said Chris Pesce, president of Maritime General Agency, in a statement. Maritime General Agency is the program administrator for recreational marine risks written through New Hampshire Insurance Company. MGA insures marinas, boat dealers, yacht clubs, boats, yachts and charter vessels.
➥ Company adds liveaboard insurance
➥ http://www.tradeonlytoday.com/images...ws/mga0724.pdf

[TabbyCat]

You may have heard that Zurich has exited the marine insurance market as of May this year. They had a policy called the Quartermaster which had a liveaboard endorsement. Zurich's exit left a void in the market, so IMIS has been working closely with Maritime General to come up with a replacement, the result of which is the Liveaboard Endorsement that you mention above.

The only two policies that I am aware of that currently have this type of personal liability coverage are Maritime General & Markel Jackline. The Maritime General policy is designed for vessels navigating within the continental United States, excluding vessels moored in southeast coastal waters from NC through TX between June 30th and November 1st. The Markel Jackline policy is aimed at offshore cruisers navigating worldwide.

If CF members are interested in either policy, you know where to find us.

Fair Winds,
Susan

[Galdarol]

Originally Posted by 1960cjj

So with the IRS you are guilty until proven innocent.

Craig

And legislation is afoot to revoke your travel privileges if they claim (no proof necessary) that you owe $50K or more.

[denverd0n]

Originally Posted by Captain Bill

You can't take a second mortgage out on your residence and take this deduction.

Yes, actually, you can. From the IRS's own website...

"Generally, home mortgage interest is any interest you pay on a loan secured by your home (main home or a second home). The loan may be a mortgage to buy your home, a second mortgage, a line of credit, or a home equity loan."

All the details here: Publication 936 (2011), Home Mortgage Interest Deduction

And, according to that same site, a "home" can be a boat, RV, pretty much anything, so long as it has "sleeping, cooking, and toilet facilities."

So, if you borrowed money to buy your boat, and the boat is collateral for the loan, then you can deduct the interest. Also, if you took out a second mortgage on your home, or got a home equity loan to pay for the boat, then that interest is also deductible.

[SaltHeart]

I live in florida and have just signed up for insurance here. Most all the insurance agencies I shopped asked if I was a live aboard. I would defintely disclose to your insurance company that you are a live aboard. In the event you have to place a claim they will always look for a reason to deny it. Lack of disclosure about being a live aboard would surely be enough reason to deny your claim.

[Mike Banks]

Marine insurance is getting tougher in the Land of Oz.

I have a Piver trimaran which no one wants to insure--although I have survived two cyclones in it with no more damage than scraped paint where a mangrove rubbed against it--fixed for under twenty dollars so not worth claiming, yet many they did deem insurable were lost or severely damaged in Yasi.

Now most will not insure anything above the tropic of Capricorn, and when they do the prices are absurd. A trawlerman I know pays fourteen thousand dollars a year for being a commercial user--but the chances of losing the vessel are probably less than an amateur afloat in reef waters.

A yacht is more expensive than most cars--but the chances of loss at sea are I suspect less than the chances of damage or loss of a vehicle or truck.

Yes--I think that in some cases it is a racket. What really makes it difficult is when it becomes a legal requirement to be subject to the racketeers.

If you are a liveaboard you have even less chance of getting cover.

[JanetGroene]

Related topic: I heard from a liveaboard who (too late) found wording in his warranty something like this: "This vessel is for recreation purposes and is not intended to be used as a full-time home. To do so can void this warranty."

[Rakuflames]

Originally Posted by grouchyturtle

Oops, forgot to update.

Talked to my insurance a few weeks ago, BoatUS. According to them, there's no such thing as a live aboard. They could care less if you live aboard full time, part time, or not at all. Care less to the point of not even wanting or needing to make a note on my policy stating that I'm a live aboard.

That's what they told me, too.

[jacob30]

Same here. Very reasonable rates too! Was about a third of my previous insurance who specifically did not allow liveaboards.

Originally Posted by grouchyturtle

Oops, forgot to update.

Talked to my insurance a few weeks ago, BoatUS. According to them, there's no such thing as a live aboard. They could care less if you live aboard full time, part time, or not at all. Care less to the point of not even wanting or needing to make a note on my policy stating that I'm a live aboard.

Also, on another note the "great" Frank-Dodd Act may have a bearing on whether your bank will loan on a liveaboard. Most will not so tell them only what they ask.

[Hudson Force]

Since 1972 we have always responded to IRS tax forms with our boat as our home. At times we have deducted specialty fuel use taxes, Solar/wind power benefits and home mortgage deductions when applicable. Regarding our registration in the State of Florida we have paid sales tax at purchase and yearly registration fees without any differences distinguishing "livingaboard". We always were candid with our living aboard status with insurance carriers; however, since 2004 we have carried 300K to 500K liability only. The only time we do not specifically use the term "Liveaboard" is when we are actively cruising and anchoring throughout Florida waters, but during these time when we are designated as "Full Time Cruisers" the State of Florida has a definition for "Liveaboard Vessel" that specifically does not apply to us.