Pool and Taxes

[Henry Pachulski]

If I build a new pool in my backyard:

1) Is the interest deductible?
2) Do I have to refinance the home mortgage to get the deduction?
3) If I could pay cash would I be able to write off the pool under section 179
for 1996
4) Or may I depreciate the pool in subsequent tax years?

Thanks in Advance.

[TomHealy CPA]

Re: <If I build a new pool in my backyard:

1) Is the interest deductible?>

If the loan is secured by your residence it would probably be acquisition
debt and thus deductible interest.

<2) Do I have to refinance the home mortgage to get the deduction?>

It depends (my favorite phrase! <g>). You would at least need an equity
loan or line of credit; it may be more advantageous to refinance, since
interest rates have dropped recently.

<3) If I could pay cash would I be able to write off the pool under
section 179
for 1996
4) Or may I depreciate the pool in subsequent tax years?>

Only if the pool is used exclusively for business purposes. I.e., you are
a swimming instructor and the pool is used ONLY for teaching swimming - no
personal use at all :-(

Tom Healy, CPA
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