AR, Important Tax advice for when you head south of the Border to hang on your 130 foot schooner... -vbg-
Come Sail Away
I live in Los Angeles and am interested in living on my sailboat. Can I qualify for a home mortgage interest deduction if the sailboat is my primary residence?
-- Tom Smuts
Tom,
I can hear the lulling swish of the waves now.
If you do decide to live on the ocean blue, your sailboat can qualify as your main home. In fact, your principal residence can be anything, including a condominium, a cooperative apartment, a houseboat or a trailer, as long as you live there the majority of the time, says Rande Spiegelman, personal financial services manager at KPMG.
But the IRS will want proof you're actually living on your boat. "The service will probably ask if you own any other residential properties and if you use them," notes Spiegelman. If you do, the service may not buy the boat thing. The IRS might check where you vote, the address on your tax returns, where you belong to social or religious groups, where your kids go to school. If it all points to the location of your boat slip you should be fine.
In addition, you must be able to prove the mortgage was taken out specifically for the boat. If so, then you can take that mortgage interest deduction, says Spiegelman.
Check out Section 163 for more on this interest deduction.
.
|
