Yachts shouldn't be eligible for tax write-off, says Michigan Congressman

Michigan Congressman Gary Peters wants to close a loophole that allows people to write off the interest they pay on their yacht loans.

Peters says current law allows people to deduct the interest on two residences.

"But the way the deduction is written, it’s anything that has a toilet, a kitchen and bedding, so yachts qualify, and so you’ll find that many people write off the interest in financing their yachts."

Peters says the loophole cost the U.S. Treasury a billion dollars in 2004, the last time the Congressional Budget Office examined the issue.

Peters says if someone's yacht is actually their principal residence, they will still be able to deduct interest payments on the boat loan from their taxes.

He says closing the loophole will help shrink the deficit, and make the tax code more fair.