Can a boat sale loss be deducted?
 

I'm fishing for tax deductions. Can the loss from the sale of a boat used
as a second home legally be deducted on federal income taxes? Just
wondering?

Ed

"Oysters8" wrote in message
ews.com...
I'm fishing for tax deductions. Can the loss from the sale of a boat used
as a second home legally be deducted on federal income taxes? Just
wondering?

Ed

Not a tax man, and don't even play one on TV.

However, in a tax environment where, if you live in it for the last two
years, you can escape any tax on the gain on your home, I doubt you could
take a loss.

If it were investment property, properly documented, depreciated, and
reported as such all along the way, if your sale price returned less than
the adjusted basis (due to the depreciation taken before), you'd have
grounds for a loss.

L8R

Skip, getting out of the investment property business

--
Morgan 461 #2
SV Flying Pig
http://tinyurl.com/384p2

"Twenty years from now you will be more disappointed by the things you
didn't do than by the ones you did do. So throw off the bowlines. Sail
away from the safe harbor. Catch the trade winds in your sails. Explore.
Dream. Discover." - Mark Twain

Ed,

You can always ask the IRS if they would disallow your intended deduction.

I'm thinking their position would be that you received the value as deferred
maintanence, and as such no loss exists.

I'm fishing for deductions too, but only bullet-proof ones.

Best of luck.

Bob
"Oysters8" wrote in message
ews.com...
I'm fishing for tax deductions. Can the loss from the sale of a boat used
as a second home legally be deducted on federal income taxes? Just
wondering?

Ed

You can under the same conditions you would for a house. IOW, you
cannot claim a loss for a home if it was solely used as a house. If
you used a portion of the boat as a business, either as an office, or
as a charter, etc, then the portion of the boat that was used as a home
office would be capable of being claimed as a loss. IE, $100,000
boat, with 20% being used as a home office sold for 50,000. The sale
is then considered to be two sales, a sale of a home office and a sale
of a regular house.
The home office depreciated, so it was worth 20,000 (20% of the
original 100k). It dropped in value by half, so you can report 10,000
as an ordinary loss to the IRS. The main reason for this is the IRS
is trying to get taxes from people who's home office appreciate, so the
rules were setup to seperate out a home office from a regular house and
then nail people for the appreciation in value of the portion of the
home that was their home office.

If you haven't been doing something like this though throughout time
you had your boat (ie claiming a portion of it as a business or home
office), then you also can't deduct.

Doug