From the Boathouse: Section of new bill not neccessary
Ahoy!
I am giving the order for all hands on deck as a bill has been introduced by California legislators to abolish second-home mortgage deduction, which includes any vessel with a mortgage and listed as a second home.
AB 71 was introduced by Assembly Member David Chiu (D-San Francisco) and coauthored by Assembly Members Kevin Mullin (D-San Mateo) and Phil Ting (D-San Francisco) and the bill includes Section 3, which specifically is to eliminate the second-home mortgages to supposedly fund low-income housing.
As I mentioned this bill would not only affect home owners but many boat owners in California.
I love how the bill only includes narrative how the bill would affect those with a second home in Council’s Digest, but Section 3 lists very limited wording with only three lines of text that you can read below.
“SEC. 3. Section 17225 of the Revenue and Taxation Code is amended to read:
17225. (a) Section 163(h)(3)(E) of the Internal Revenue Code, relating to mortgage insurance premiums treated as interest, shall not apply.
(b) Sections 163(h)(4)(A)(I)(II) and 163(h)(4)(A)(ii)(II) of the Internal Revenue Code shall not apply.”
The bill, AB 71, appears to be based on the fallacy that those who own boats or second homes are only the wealthy and as such, the second-home mortgage deduction is subsidizing their lifestyles.
First, let me make it clear that no one is receiving a subsidy, but merely being able to deduct mortgage interest on their taxes if they own a second residence with a mortgage.
Boats to qualify as a second home must have, of course, a mortgage, a sleeping quarter, a galley capable of preparing chef’s special meals, and a head. Locally, we call these floating condos, and our harbors are filled with boats that rarely leave the slip, yet the owners regularly spend the weekends aboard their boats.
Second-home qualifications for these boaters make sense, as these boats are being utilized similar to owning a second home in the mountains or desert.
Keep in mind that you have to stay aboard your boat overnight for at least two weeks out of the year. How do you prove the time now?
You probably can use your logbook entries, and receipts from marinas that you visited during the year. Do you log your time aboard in the ship’s logbook?
The National Marine Manufacturers Assn. and its lobbying partners are taking action to remove Section 3 of AB 71 from this bill. Remember, this is not just a boating related issue but anyone with a second home who has a mortgage.
Tip of the week
Do you hold a maritime credential that is expiring after Dec. 1, 2016?
If you do then this notice from Capt. Rags Laragione, president of the Maritime Institute, is very important for you.
The U.S. Coast Guard’s National Maritime Center is underwater after experiencing a flood of new and renewal applications to process for Merchant Mariner Credentials commonly on the water known as MMC’s. Therefore, mariners are at risk of losing their credentials, and thus, their livelihood.
However, the Coast Guard does not want United States licensed mariners to be in jeopardy because of an administrative processing snafu.
“[The Coast Guard has] said they may be unable to process all Merchant Mariner Credential (MMC) applications on time and so they are granting an extension of national endorsements for any mariner whose MMC expires on or after Dec. 1, 2016,” Capt. Laragione said.
Great news, but mariners and employers need to print and carry an extension letter from Kirsten R. Martin, Coast Guard Captain, who is the commanding officer at the National Maritime Center.
The letter can be downloaded from the NMC at www.uscg.mil/nmc/announcements/pdfs/2016_national_extension_authorization_letter.pdf.
Lastly, the complete notice from the Coast Guard is online at www.uscg.mil/nmc/announcements/pdfs/mmc_processing_delays_update.pdf.
Capt. Laragione or better known as “Rags,” always concludes with “the key to safe boating is education; so let’s get educated!”
Safe Voyages!
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MIKE WHITEHEAD is a boating columnist for the Daily Pilot. Send marine-related thoughts and story suggestions to mike@boathousetv.com or go to boathousetv.com.