Does a yacht qualify as a residence for purposes of deducting interest expenses on a residence under Internal Revenue Code 163?
Under IRC section 163 (h)(2) a taxpayer may decuct any qualified interest on a qualified residence, which is defined as a principal residence and one other residence owned by the taxpayer for purpose of deductibility for the tax year. IRC section 163 (h)(3) defines qualified residence interest as any interest which is paid or accrued during the tax year on acquisition or home equity indebtedness with respect to any qualified residence of the taxpayer. In accordance with IRC section 163 (h)(4), a boat will be considered a qualified resdence if it is one of the two residences chosen by the taxpayer for purposes of deductibility in the tax year as long as it provides basic living accommodations such as sleeping space (berth), a toilet (head), and cooking facilities (galley). If the boat is chartered out, the taxpayer will have to use the boat for personal puposes for either more than 14 days or 10% of the number of days during the year the boat was actually rented, in accordance with IRC
Related Questions
- My organization does not have federal exemption (or is exempt under a different Internal Revenue Code section). How do I obtain tax-exempt status for California?
- Can I deduct my Web site expenses as costs of producing income under Internal Revenue Code Section 212?
- I have barcodes on my mailpieces that are used for internal purposes. Do these qualify for the discount?
