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Will you be cruising the waters on your boat or camping out in your RV this year? Whether you’re exploring the Gulf Coast or escaping into the hills, your favorite recreational vehicle might do more than just bring you joy. If certain conditions are met, it could also bring you some impressive tax benefits.

These opportunities aren’t always obvious, and the tax code can get a little murky when it comes to personal property. That’s where McAllen tax experts come in — helping you understand and claim what you’re entitled to without the stress of second-guessing. Let’s break down four tax strategies that could help you save.

1. Turning Pleasure into Profit: Chartering Activities

It’s not uncommon for boat owners to turn their passion into profit by chartering their vessels for sightseeing cruises or fishing excursions when not in personal use. Essentially, you’re running a small business — and the IRS sees it that way too.

This opens the door to a wide range of deductible expenses. You may be able to write off costs like fuel, repairs, insurance, dock or mooring fees, supplies, maintenance equipment, and even binoculars or fishing gear. Plus, you could take advantage of a depreciation allowance for the boat itself — a potentially significant deduction if your vessel is worth a good chunk of change.

But there’s a catch: you can only deduct the portion of expenses that relate to business use. So, if you use the boat 50% of the time for charter services and 50% for personal outings, you can deduct half of the qualifying expenses.

You’ll also need to ensure your chartering activity is viewed as a legitimate business and not a hobby. The Tax Cuts and Jobs Act (TCJA) eliminated deductions for hobby expenses for the years 2018 through 2025. Getting tripped up by this distinction can mean losing all your deductions. McAllen tax experts can help establish your activity properly and determine whether you need to file self-employment taxes or take other steps to stay in compliance.

2. More Than Just a Ride: Mortgage Interest Deductions

Many people know that mortgage interest on their primary home is deductible, but far fewer realize that a boat or RV might also qualify — if it’s considered a second home under IRS guidelines.

To meet this definition, the property must include basic living amenities: sleeping quarters, a toilet, and cooking facilities. If your RV or boat has these features, you could deduct the mortgage interest just as you would for a cabin in the mountains or a condo by the beach.

This deduction is subject to the TCJA limits, which reduced the cap on acquisition debt from $1 million to $750,000 for loans taken out after December 15, 2017. Older loans may be grandfathered under the previous limit. The deduction for home equity debt has also been generally eliminated unless the funds were used to buy, build, or substantially improve the home.

Navigating these conditions can be tricky, and the rules are not always intuitive. That’s why working with McAllen tax experts is so valuable. They can review your loan documents and RV or boat features to help determine if you qualify and how much you can deduct.

3. Giving Back: Charitable Donations

Maybe it’s time for an upgrade, or maybe the open road (or sea) no longer calls to you like it used to. Donating your boat or RV to a qualified charity can be a generous way to move on — and a smart tax move if you itemize your deductions.

The IRS allows you to deduct the fair market value (FMV) of the donated property, assuming the organization uses it in a way that furthers its mission. So, if your RV is worth $50,000 and you donate it, that’s a $50,000 deduction — even if you originally paid more for it.

However, this isn’t a “no paperwork” situation. You’ll need a written appraisal from a qualified professional if the value exceeds $5,000. You’ll also need to ensure the charity qualifies under IRS rules and that the vehicle is actually put to use rather than immediately sold.

There are also reporting requirements, including filing IRS Form 8283. McAllen tax experts can walk you through the process, make sure every “i” is dotted, and help you avoid costly missteps that might raise red flags with the IRS.

4. Big-Ticket Bonus: Sales Tax Deductions

Big purchases usually come with big sales tax — and if you recently bought a new boat or RV, that could mean an unexpected opportunity to save on your federal taxes.

Under current tax law, you can choose to deduct either state and local income taxes or sales taxes, but not both. This decision is part of the broader SALT (state and local tax) deduction, which is capped at $10,000 per year through 2025.

When electing to deduct sales tax, you can use either the actual amount paid (if you have the receipts) or refer to IRS-provided tables based on your income and location. But here’s the kicker: even if you use the table, you can still add in the sales tax on big-ticket items — and boats and RVs definitely qualify.

That extra deduction can help reduce your taxable income significantly, especially if the standard deduction doesn’t work in your favor. McAllen tax experts can help you decide whether deducting sales tax or income tax makes the most sense based on your unique situation.

Make the Most of Your Outdoor Adventures

Boats and RVs are about freedom, exploration, and fun — but they can also offer some powerful tax breaks. From turning your hobby into a business to making a charitable impact, there are numerous ways to make these investments work harder for you come tax time.

Of course, these deductions often come with strings attached. Paperwork, rules, thresholds, and fine print can turn a relaxing adventure into a compliance nightmare. Fortunately, you don’t have to figure it all out on your own.

Contact Burton McCumber & Longoria — your trusted McAllen tax experts — to ensure you’re making the most of your investments. Whether you’re looking to deduct interest, claim a donation, or turn your weekend charter into a legit business, our experienced professionals are here to guide you every step of the way.