Fiscal Cliff: as it relates to boats in USA

MouseTrap

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Politics aside, what are peoples thoughts about the potential loss of deduction for mortgage interest? Obviously, this deduction is one of the most widely used "loopholes" available to the general public. It has been shown that Americans buy bigger (more expensive) homes because they calculate the savings that they can apply to their 1040 Schedule A.

However, if a boat has a galley with a head & shower, it may be considered a second home, and the interest on a boat loan can be deducted as well. Even if a boat lacks those amenities, the interest from a home equity line of credit (used for any reason) can be deducted (up to $100,000).

I would imagine the boat builders on this forum have a strong opinion. Anyone else given this any thought as it relates to boats?
 
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jrg

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No shortage of strong opinions around here! Including mine... It pisses me off that our legislators think that ending the second home/boat deduction is a way of extracting more money from those than can pay. What they don't realize is that all it's doing is hurting the people that build the boats, read Maine, who will sell fewer. The corporate jet tax deduction deal is the same thing... CEO's that fly in them won't care, but it will hurt the guy working on the Cessna Citation line in Wichita, that's for sure.
 
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Blitzen

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No shortage of strong opinions around here! Including mine... It pisses me off that our legislators think that ending the second home/boat deduction is a way of extracting more money from those than can pay. What they don't realize is that all it's doing is hurting the people that build the boats, read Maine, who will sell fewer. The corporate jet corporate tax deduction deal is the same thing... CEO's that fly in them won't care, but it will hurt the guy working on the Cessna Citation line in Wichita, that's for sure.

Don't get me started. My wife works for Textron who owns Cessna Jets. She just returned from Wichita and a factory tour, the BS is endless. Sales are in the hole and the corporations are not buying anything. It is the trickledown effect to the American worker who loses. Only if our government could get spending under control and not spend more than it takes in will we see any improvement.
 

MouseTrap

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Yeah, boats aside. With the recent real estate crash, the thing that saved (some) tradesmen in the home-building business, was remodeling work that increased with people deciding to stay put. Take away the interest deduction on home equity loans, that business along with new home building business both will come to a complete halt (at least in the short term).

I know for a fact, that I may be in my little pocket downeaster for a considerably longer time with the loss of the interest deduction. For fishermen it's their lifeblood. For non-fishermen boating is a luxury, an expensive luxury for a 5 month season in the Northern climates.
 

Blitzen

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Yeah, boats aside. With the recent real estate crash, the thing that saved (some) tradesmen in the home-building business, was remodeling work that increased with people deciding to stay put. Take away the interest deduction on home equity loans, that business along with new home building business both will come to a complete halt (at least in the short term).

I know for a fact, that I may be in my little pocket downeaster for a considerably longer time with the loss of the interest deduction. For fishermen it's their lifeblood. For non-fishermen boating is a luxury, an expensive luxury for a 5 month season in the Northern climates.

No doubt! The season is way too short up this way.
 

jrg

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I would imagine that comm fishermen will still be able to account for boats, interest, depreciation as in the past, right? I don't think this BS legislation will affect their decisions... Only us "rich" guys and our families trying to enjoy the water.
 

BillD

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Personally I believe ALL federal tax deduction loopholes need to be eliminated.

TAX REFORM equals "fairness"

If we ALL want fairness, how can we have one group subsidized over another? Rich, middle class or poor?

Federal tax deductions should be the amount of taxes ALREADY paid @ the state and local level and charitable contributions to non-profit organizations who help the sick and poor.

SPENDING is what's killing our country and economy. Too many takers, not enough makers.

FWIW, Bill D
 

Sailorgp

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One plan is to limit ALL personal itemized deductions (mortgage interest, all taxes, all charitable contributions) to somewhere between $35-50K on your federal tax return schedule A. How many people have personal itemized deductions over $50,000?
 

MouseTrap

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Simplifying the tax code would be a great first step. The CFO at my company has a CPA do his personal taxes because he can't keep up with the regulations. Imagine life with a flat tax!
 

Tuna Pursuit

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Who in thier right mind would be in favor of giving this federal government one more penny. The senate has not had a budget for 3 1/2 years. The whitehouse has no budget, they can't get one vote on thier budget. SO the first thing to do is come up with a f^%$ing budget!!!!! Then we can talk about raising more money so you know where the f&^% your hard earned money is going and we can look at cutting spending, waste & fraud. It's beyond broken it is now peverse.
 

Muscie

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The debate of taxes & spending can go indefinitely, however, the country does not have forever. No matter what they do w/the tax code, they cannot tax their way out of deficits, rising entitlement costs, & increasing national debt. Many things need to happen at the same time which include, revenue increases, enforcement of compliance, & most significanltly, spending cuts. The loss of the interest deduction would be devestating to the overall real estate mkt, the 2nd home mkt, & the larger end boat mkt. Mortgage interest is already limited to acquisition debt of 1mil& 100k of equity interest. To complicate things, many deductions are lost to the alternative minimum tax. If the the current tax law was cleaned up a.bit (ie. Hedge fund.managers paying tax at 15% for mgt. Services as oppossed to ordinary income like any one else who has earned income) & avoiding irresponsible behavior by or legislature by allowing estate tax to be non existent for all of 2010 - ie. Several biilionaires estates paid 0 tax that year, & there was more compliance, the tax code could remain relatively unchanged. Unfortunately, you need complexity to get fairness. I could go on, but my main point is that spending is increasing 4% a year, you can't increase tax rates 4% a year. What needs to be done is spending needs to be limited to a reasonable % of GDP, not unlimited. If we continue, regardless of the tax changes, we will go back to the early 70s & have stagflation, stagnant economy, hi inflation, & high interest rates. - my $.02
 
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