This legislation notice from BoatUS, A SALTY SOUTH EAST CRUISERS’ NET SPONSOR, is definitely good news for the middle-class boat owner looking for income tax deductions.

NEWS From BoatUS
Boat Owners Association of The United States
880 S. Pickett St., Alexandria, VA 22304
Read this press release online at: http://goo.gl/1wyr0M
All BoatUS news can be found at: BoatUS.com/pressroom

A boat is considered a second home for federal tax purposes if it has a galley, an installed head and sleeping berth.

FOR IMMEDIATE RELEASE
Press Contact: D. Scott Croft, 703-461-2864, SCroft@BoatUS.com

In Rare Act of Agreement, Last Congress Does the Right Thing for Boat Owners
Tax Provisions for Boats Extended

WASHINGTON, DC, January 27, 2015 — In an exceptional act of agreement, the recently departed 113th Congress did the right thing for boat owners. It extended some boat sales tax and mortgage interest deductions when filing a 2014 federal income tax return. The catch is a boat has to include a sleeping berth, cooking and toilet facilities, and is offered to new owners who paid substantial state sales taxes on a new or used boat purchase last year. If there is a loan taken, mortgage interest paid on the loan may be also be deducted from your federal income taxes, according to the nation’s largest boater’s advocacy group, Boat Owners Association of The United States (BoatUS).

The Sales Tax Deduction

The Tax Increase Prevention Act of 2014 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.

During federal budget negotiations last year, some in Congress sought to eliminate this deduction for boat owners while keeping it in place for second home and recreational vehicle owners. BoatUS advocated for a more equitable all-or-nothing approach when applying the deduction, and boaters did not get unfairly singled out.

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 adviser 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.
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About BoatUS:

Boat Owners Association of The United States (BoatUS) is the nation’s leading advocate for recreational boaters providing its over half-million members with government representation, services such as 24-hour dispatch, on water boat towing as well as roadside assistance for boat trailers and tow vehicles, feature-packed boat insurance programs, money-saving benefits including marina and service discounts, and vital information that improves recreational boating. Its member-funded BoatUS Foundation is a national leader promoting safe, clean and responsible boating and offers range of boating safety courses ‘“ including 33 free state courses ‘“ that can be found at BoatUS.org/courses.

The article below comes from Sounding’s Trade Only Today and might well offer some hope to the dilemma boaters using gasoline often find themselves. See a warning posted recently by BoatUS: /?p=146615

NMMA supports fuel-standard revision in Keystone XL bill
Posted on January 22nd, 2015

The National Marine Manufacturers Association is applauding an amendment floated to the Keystone XL pipeline bill that would remove corn ethanol from the Renewable Fuel Standard.

U.S. Sens. Dianne Feinstein, D-Calif., and Pat Toomey, R-Pa., floated the amendment, which is called the Corn Ethanol Mandate Elimination Act of 2015, according to the NMMA. U.S. Sen. Jeff Flake, R-Ariz., is a co-sponsor.

The amendment would remove the mandate to blend normal ethanol into gasoline but preserve other renewable fuel mandates, including those for biodiesel and cellulosic ethanol. The standard ethanol mandate is effectively a corn ethanol mandate, the sponsors said.

Citing growing food prices and an increasing amount of corn ethanol in the U.S. fuel supply (the fuel standard caps corn ethanol production at 15 billion gallons), Feinstein called the bill a simple and smart modification of the RFS.

`Once we remove the corn ethanol mandate, the RFS program can finally serve its intended purpose: to support the development of advanced, environmentally friendly biofuels, like biodiesel, cellulosic ethanol and other revolutionary fuels,’ Feinstein said, according to the NMMA.