“To amend the Internal Revenue Code of 1986 to include watercraft as applicable passenger vehicles for purpose of deducting personal loan interest.”
No CRS summary available for this bill.
This section revises the definition of applicable passenger vehicle under IRC §163(h)(4)(D) to include applicable watercraft—specifically, recreational vessels (as defined in 46 U.S.C. §2101) that are motorboats (as defined in 46 C.F.R. §90.10–23, as in effect on enactment date), the original use of which commences with the taxpayer, and the final assembly of which occurs in the United States—in addition to applicable motor vehicles (previously the sole category, i.e., certain new U.S.-assembled cars, minivans, vans, SUVs, pickup trucks, or motorcycles under 14,000 pounds gross vehicle weight rating). (As background, qualified residence interest under IRC §163(h)(3) is deductible and can include interest on boats or recreational vehicles (RVs) with sleeping, cooking, and toilet facilities used as a principal residence or second home, subject to allocation rules under §163(h)(4)(B).) The section requires inclusion of a hull identification number (in addition to vehicle identification numbers) on tax returns to substantiate such interest deductions, makes a conforming change to mortgage interest reporting by lenders under IRC §6050AA, and applies to indebtedness incurred after December 31, 2024.