This weeks article comes to us complements of Boat U.S. If you are like us you are always looking for smart tax deductions. Unfortunately this deduction opportunity does not exist for me; but it does serve as great ammunition in my argument with my wife to purchase a bigger boat.
NEWS From BoatU.S.
Boat Owners Association of The United States
880 S. Pickett St., Alexandria, VA 22304
BoatU.S. News Room at http://www.BoatUS.com/news/releases.asp
FOR IMMEDIATE RELEASE
Press Contact: Scott Croft, 703-461-2864, SCroft@BoatUS.com
TWO FEDERAL TAX DEDUCTIONS REMAIN FOR BOATERS
ALEXANDRIA, Va., Jan. 15, 2008 –When Congress adjourned for 2007, they left in place two federal income tax deductions of potential benefit to boat owners.
A boat is treated like a second home for federal tax purposes if it has a galley, a head, and sleeping berth. Mortgage interest paid on the loan is deductible from your federal income taxes. Taxpayers may use the mortgage interest deduction for one primary home and one second home and must itemize deductions on their returns.
Some boaters may be unaware of this potential tax benefit because not all lending institutions send borrowers an Internal Revenue Service form 1098 which reports the interest paid. Not receiving the form does not preclude taking the deduction. If a 1098 is not available, boaters should contact their lender for the amount of interest paid and should enter it on line 11 on Schedule A along with the lender’s tax ID number. If a form 1098 is sent, boaters should simply enter the amount on line 10 of Schedule A.
The other tax benefit is a deduction for state sales taxes. However, this may no longer be available after the 2007 tax year if Congress does not act to extend it. This deduction may be appropriate for boaters who paid substantial sales tax on the purchase of a new or used vessel last year. Boaters must choose either the state sales tax deduction or state income tax deduction on their federal tax return — you cannot take both.
In addition