Will you cruise on your boat or camp in your RV this year? Your personal property can give you more than just enjoyment. You might qualify for valuable tax breaks if you follow certain rules.
Here are four ways to maximize your tax savings.
1. Charter Your Boat as a Business
Some boat owners rent out their vessels when they are not using them. This is called chartering. You may allow others to use your boat for sightseeing or fishing trips. If you do this, you turn your boat into a business.
You can deduct many costs as business expenses. These include fuel, repairs, insurance, supplies, equipment, storage, mooring, and even fishing gear. You can also claim a depreciation deduction for your boat.
Only deduct the portion of expenses that matches your business use. For example, if you charter your boat 50% of the time, you can deduct half the costs. Make sure you treat your activity as a business and not a hobby. If the IRS sees it as a hobby, you may lose these deductions. Running a business can also mean you must pay self-employment tax.
2. Deduct Mortgage Interest on Boats and RVs
You can usually deduct mortgage interest on your main home. However, you may also deduct mortgage interest on a second home. Surprisingly, the IRS allows certain boats and RVs to count as a home for this rule.
Your boat or RV must have a place to sleep, cook, and a toilet. Most RVs and many boats have these features. If your property meets these rules, you can deduct the interest.
New loans are limited to $750,000 ($375,000 if married filing separately). Older loans may have higher limits if they were made before 2018. Check your loan date to be sure.
3. Get a Tax Break for Charitable Donations
You may decide to donate your boat or RV to charity. If you do, you might qualify for a tax deduction. You must itemize deductions to claim this benefit.
Usually, you can deduct the fair market value of your boat or RV when you donate it. For example, if you bought an RV for $80,000 and it is now worth $50,000, you deduct $50,000.
Get a professional appraisal if your donation is worth more than $5,000. The charity must also use the boat or RV to help its programs. Only donate to qualified charities. Keep all paperwork and records for your tax return.
4. Deduct Sales Tax for Large Purchases
When you buy a boat or RV, you may deduct the state and local sales tax you paid as part of your SALT (state and local tax) deduction.
For 2026, the SALT deduction cap is $40,400 ($20,200 if married filing separately). This cap increases each year for inflation until 2029. In 2030, the limit drops back to $10,000 ($5,000 for married filing separately).
These deduction limits start to phase out if your modified adjusted gross income (MAGI) is above a certain threshold, which the IRS adjusts each year for inflation. The deduction is reduced by 30% of the amount your MAGI exceeds this threshold. However, you can always deduct at least $10,000 ($5,000 if married filing separately), even after the phaseout.
You can deduct the actual sales tax paid, if you keep receipts, or use the IRS sales tax tables. If you use the table, you can add sales tax paid on “big-ticket” items, such as boats and RVs. The actual expense method may offer a larger deduction if you made a large purchase.
Summary
Owning a boat or RV can bring both fun and tax benefits. You may also find other opportunities, like using your property for transportation for hire or claiming a home office deduction if you qualify. Always keep good records and check the current IRS rules.
Tip: Speak with a tax professional to make sure you claim every deduction you deserve.