Financing a new boat

[HangOutdoors]

Be wary of "Interest is deductible" on your taxes. That is not the case anymore with the tax law changes that went into effect. It has to be used for specific purposes, such as building a home, major renovations, or buying a home. Purchasing boats or paying off debt are not included anymore and will be heavily scrutinized by the IRS. I recommend if anyone wants to use their HELOC's etc. for purchasing boats to speak with qualified tax professionals regarding allowances for writing off interest regarding purchase/use type. And make sure they are current on IRS Codes and Tax laws. Of course this may change in the future if new laws are enacted or the IRS Code changes.

Using equity in your home for purposes that you used to be able to do can/will get you into possibly owing taxes in an improper write off situation, or worse case an audit with potential penalties.

The original Act (TCJA) was passed in 2017, with the changes. I believe the requirement began with tax year 2018 and extends through 2025, but would suggest you validate this with a qualified tax professional.

Additionally, HELOC's have variable rates, typically interest only and you could get hit pretty bad if we hit a recession or downturn and rates sky rocket. At least with a fixed rate loan, you have a never changing budgetable payment.

 

[kgower]

@kawack11 you can always try you regular bank if that doesn't work out then shop around. Small local banks and credit unions are usually happy to gain new business.

 

[Kawak11]

@kawack11 you can always try you regular bank if that doesn't work out then shop around. Small local banks and credit unions are usually happy to gain new business.

If I actually have a boat to purchase in 2021, I’ll give the dealer a shot on the rate. If not I found Essex Credit (Bank of the West) to have really competitive rates. Rates are posted online and updated daily.

 

[traderfjp]

I found this but I would check with your accountant: According to the IRS, only a few categories of interest payments are tax-deductible: Interest on home loans (including mortgages and home equity loans) Interest on outstanding student loans. Interest on money borrowed to purchase investment property. It doesn't state how you have to spend the money but I could be wrong. On our HELOC we only have to pay interest which means the loan would never be paid off but it's good if money is tight one month. When money is plentiful then you can make a bigger payment. There aren't any costs if you keep the loan open for 3 years. We use Penfed and they are excellent Before we moved we used our HELOC to buy a foreclosure cash and then just paid the interest until we sold our main home. The loan gave us options. We had money tied up so we would have had to pass on an amazing opportunity.