Boat Owners May Have Federal Tax Deductions Available

Boat Owners May Have Federal Tax Deductions Available
Boat Owners May Have Federal Tax Deductions Available
Boat Owners May Have Federal Tax Deductions Available

From Boat US

ALEXANDRIA, Va. -- Recreational boat owners who paid state sales taxes on a boat purchase, or those who secured a loan to finance a boat, may have some tax deductions coming to them when filing their 2010 federal income tax return, says a national boat owners group, BoatUS.

The Sales Tax Deduction
For boat owners who paid substantial state sales taxes on a new or used boat purchase last year, the Tax Extenders Act of 2008 continues to offer a federal tax deduction for state sales taxes. 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, to take the state sales tax deduction, the sales tax on a boat purchase must be applied at the same tax rate as the state’s general sales tax. In order to claim the sales tax deduction, tax returns must be itemized. State sales taxes are entered on IRS form Schedule A line 5b.


The Boat Loan Deduction
For those owners with a secured boat loan, mortgage interest paid on the loan may be deducted from your federal income taxes. Taxpayers may use the home mortgage interest deduction for one second home in addition to their primary home, and must itemize deductions on their returns. A boat is considered a second home for federal tax purposes if it has a galley, an installed head and sleeping berth.


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.


Sorry, AMT
For those who fall under the Alternative Minimum Tax, most deductions are unavailable. Boaters are urged to contact a tax preparer or financial advisor for more information.

For more details on the mortgage deduction on boats that qualify, go to www.IRS.gov and download Publication 936 or the Fact Sheets. For state tax deduction information download Publication 600 which also includes state-by-state tax tables.

About BoatUS:
BoatUS – Boat Owners Association of The United States – is the nation’s leading advocate for recreational boaters providing over half a million members with government representation, programs and money saving-services. For membership information visit www.BoatUS.com or call 800-395-2628.


Recommended for You

Memorial Day sale offers 15 percent off everything website-wide. Coolers

Get Ready for Summer with Cordova Coolers

May 23, 2019

Memorial Day sale offers 15 percent off everything website-wide.

Brush-style bowfishing arrow rest and kits designed for simplicity and reliability. Bows

New TRUGLO Bowfishing EZ•Rest

May 23, 2019

Brush-style bowfishing arrow rest and kits designed for simplicity and reliability.

Perfect for competition or a day at the range. Other Hunting

New Gear: MidwayUSA Competition Range Bag

G&F Staff

Perfect for competition or a day at the range.

See More Recommendations

Popular Videos

New 4-Liter Dry Creek Gear Pouch from Simms

New 4-Liter Dry Creek Gear Pouch from Simms

Outdoor Sportsman Group writer Lynn Burkhead gets new product details from Simms Fishing Product's John Frazier about the new waterproof 4-Liter Dry Creek Gear Pouch.

Mustad

Mustad's New Tungsten Weights

Long known as one of the world's premiere hook makers, Mustad's Reid McKinstry shows OSG's Lynn Burkhead that the company is now one of the leaders in making tungsten terminal tackle products for anglers.

Simms

Simms' Solarflex Ultra Cool Armor Hoody

John Frazier of Simms Fishing Products helps OSG's Lynn Burkhead understand the new features of the new Simms' Solarflex Ultra Cool Armor sun protection hoody.

See more Popular Videos

Trending Stories

As most catfish anglers know, blue cats, channel cats and flatheads will eat darn near anything that fits in their mouths. Catfish

5 Ways To Catch Catfish on Lures

Keith Sutton - September 16, 2015

As most catfish anglers know, blue cats, channel cats and flatheads will eat darn near...

We found 10 secret (and proven) catfish baits that have the staying power to attract catfish time after time. Catfish

10 Secret Catfish Baits You Didn't Know About

Anietra Hamper

We found 10 secret (and proven) catfish baits that have the staying power to attract catfish...

You can catch bluegill faster with these strategies. Panfish

Find and Fish Bluegill Beds Efficiently

Terry Madewell - May 22, 2019

You can catch bluegill faster with these strategies.

See More Stories

GET THE MAGAZINE Subscribe & Save

Temporary Price Reduction

SUBSCRIBE NOW

Give a Gift   |   Subscriber Services

PREVIEW THIS MONTH'S ISSUE

GET THE NEWSLETTER Join the List and Never Miss a Thing.