schirallicpa Posted February 25, 2008 Report Posted February 25, 2008 Client purchased yacht in 2003. Took on loss on sale in 2007. Contends that it was purchased as an investment. Treated bank interest as 2nd home on schedule a in 03, 04, 05, and 06. Any thoughts on this today? Thanks. Quote
OldJack Posted February 25, 2008 Report Posted February 25, 2008 sure... my thought is that his loss is sinking with the IRS since it is not deductible. Quote
lbbwest Posted February 25, 2008 Report Posted February 25, 2008 Explain to Mr. Cake and Eat it TOO that he can't tell the IRS that it's a second home to deduct the interest and then "turn it into" a LOSING investment. Gee, investments in yachts just aren't what they used to be. lbb Quote
jainen Posted February 25, 2008 Report Posted February 25, 2008 >>he can't tell the IRS that it's a second home<< I agree. He should amend 2003 through 2006 to remove the second home. (If he can afford a yacht he's probably in Schedule A phaseout anyway, and investment interest avoids that.) This is the professional approach, because you can charge fees of more than $500 for all those X's. Not to mention all the fees for representing him at audit. Quote
michaelmars Posted February 25, 2008 Report Posted February 25, 2008 MAYBE he rented it the last few months to convert it. Perhaps Mr & Mrs Howell III wanted to rent their own boat this time around. Quote
joanmcq Posted February 26, 2008 Report Posted February 26, 2008 If it was his 'second home' then no need to amend to remove interest. But he sure doesn't get a loss on the sale of a 'second home'. Quote
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