Discussion:Boat as second home

taxbilly

This is *all* explained in the income tax regulations at § 1.163-10(p)(3). Here's what the regulations say:

§ 1.163-10(p)(3) Second residence— (i) In general. The term “second residence” means— (A) A residence within the meaning of paragraph (p)(3)(ii) of this section, (B) That the taxpayer uses as a residence within the meaning of paragraph (p)(3)(iii) of this section, and (C) That the taxpayer elects to treat as a second residence pursuant to paragraph (p)(3)(iv) of this section. A taxpayer cannot have more than one second residence at any time. (ii) Definition of residence. Whether property is a residence shall be determined based on all the facts and circumstances, including the good faith of the taxpayer. A residence generally includes a house, condominium, mobile home, boat, or house trailer, that contains sleeping space and toilet and cooking facilities. A residence does not include personal property, such as furniture or a television, that, in accordance with the applicable local law, is not a fixture. (iii) Use as a residence. If a residence is rented at any time during the taxable year, it is considered to be used as a residence only if the taxpayer uses it during the taxable year as a residence within the meaning of section 280A(d). If a residence is not rented at any time during the taxable year, it shall be considered to be used as a residence. For purposes of the preceding sentence, a residence will be deemed to be rented during any period that the taxpayer holds the residence out for rental or resale or repairs or renovates the residence with the intention of holding it out for rental or resale. (iv) Election of second residence. A taxpayer may elect a different residence (other than the taxpayer's principal residence) to be the taxpayer's second residence for each taxable year. A taxpayer may not elect different residences as second residences at different times of the same taxable year except as provided below— (A) If the taxpayer acquires a new residence during the taxable year, the taxpayer may elect the new residence as a taxpayer's second residence as of the date acquired; (B) If property that was the taxpayer's principal residence during the taxable year ceases to qualify as the taxpayer's principal residence, the taxpayer may elect that property as the taxpayer's second residence as of the date that the property ceases to be the taxpayer's principal residence; or (C) If property that was the taxpayer's second residence is sold during the taxable year or becomes the taxpayer's principal residence, the taxpayer may elect a new second residence as of such day.

In my experience, a boat may *also* be a taxpayer's "principal residence", if it satisfies *those* requirements.

Discussion: Camping trailer

I agree that with you (not that I am disagreeing with David) on the "transient: concept.

Section 56

"(e) Qualified housing interest

     For purposes of this part -
     (1) In general
       The term qualified housing interest means interest which is
     qualified residence interest (as defined in section 163(h)(3))
     and is paid or accrued during the taxable year on indebtedness
     which is incurred in acquiring, constructing, or substantially
     improving any property which -
         (A) is the principal residence (within the meaning of section
       121) of the taxpayer at the time such interest accrues, or
         (B) is a qualified dwelling which is a qualified residence
       (within the meaning of section 163(h)(4)).
     Such term also includes interest on any indebtedness resulting
     from the refinancing of indebtedness meeting the requirements of
     the preceding sentence; but only to the extent that the amount of
     the indebtedness resulting from such refinancing does not exceed
     the amount of the refinanced indebtedness immediately before the
     refinancing.
     (2) Qualified dwelling
       The term qualified dwelling means any -
         (A) house,
         (B) apartment,
         (C) condominium, or
         (D) mobile home not used on a transient basis (within the
       meaning of section 7701(a)(19)(C)(v)),"

For AMT purpose the non-primary residence must be a qualified dwelling. See (A) through (D) of (2) directly above for the meaning of qualified dwelling.

RoyDaleOne - thanks, I will need to read all of that including all the code sections and then get back on this one.

I agree Mr. Star that almost any dwelling, including a boat, can qualify for the purposes of the regular home mortgage interest deduction.

The principal residence is a fact and circumstance test:

The property that is used for a majority of the time during the year ordinarily will be considered the principal residence, Reg. Section 1.121-1(b)(2). The test of use for the majority of the time is not conclusive, however, and other factors that are considered in determining the principal residence include, but are not limited to:

(1) the taxpayer's place of employment;

(2) the principal place of abode of the taxpayer's family members;

(3) the address listed on the taxpayer's federal and state tax returns, driver's license, automobile registration, and voter registration card;

(4) the taxpayer's mailing address for bills and correspondence;

(5) the location of the taxpayer's banks; and

(6) the location of religious organizations and recreational clubs with which the taxpayer is affiliated.

Now having two or more residences and applying the appropriate test to determine the principal residence, the second residence is the one remaining, or if more than one remaining the taxpayer gets to choose from among the remaining residences that are not the principal residence as to which one is the secondary one.