The Tax Cuts and Jobs Act approved by the House last week eliminates the deductibility of mortgage interest on second homes. Owners with RVs and boats—those with a kitchen, bathroom and at least one bunk—currently can deduct the interest they pay on financing those assets.
According to CNBC, the change would be effective in 2018, although it's uncertain whether the provision will make it into any final legislation. The Senate version of the tax bill, which was approved by the Finance Committee last week, retains the current treatment of mortgage interest for both first and second homes.
But if the house version passes there is an obvious solution for taxpaying cruisers. Sell your house and move aboard full time. According to TurboTax:
The IRS allows taxpayers to designate one residence only as a main home at any one time. The main home must be the one where you ordinarily live most of the year. This can be a boat or RV even if the boat or vehicle doesn't have a permanent location. As long as it contains the required facilities, you can claim it as your main home on your taxes. The benefit of treating a boat or RV as your primary residence, is to take allowable homeowner tax deductions that can decrease your overall tax bill. As long as the boat or RV is security for the loan used to buy it, you can deduct mortgage interest paid on that loan.