A boat or a recreational vehicle can be a major purchase so you might want to finance it. If that’s the case, here are some techniques for deducting those hefty interest payments:
Use a home equity loan to finance the purchase. Generally, interest on home equity loans of up to 100,000 is tax deductible, no matter what the loan proceeds are used for.
Buy a boat or RV that’s equipped with sleeping, cooking and toilet facilities. If those elements are in place, your boat or RV qualifies as a second home. Then the interest on a boat or RV loan is just as deductible as mortgage interest on any vacation home.
If you take the second option, make sure the loan is secured by the boat or RV. The boat or RV must be pledged as security for the loan in order to qualify for mortgage interest deductions.
