This bill proposes to amend the Internal Revenue Code of 1986 to permit a tax deduction for interest paid on loans used to purchase certain watercraft. It achieves this by expanding the existing definition of an applicable passenger vehicle to include specific types of watercraft, alongside motor vehicles. This modification allows taxpayers to deduct interest on loans for qualifying boats, similar to how interest on car loans can be deducted under certain conditions. To qualify for the deduction, the watercraft must be an applicable watercraft , meaning its original use commences with the taxpayer, it is a recreational vessel, and specifically a motorboat as defined by federal regulations. Crucially, the final assembly of the watercraft must have occurred within the United States. The bill also includes conforming amendments for identification numbers, requiring a hull identification number for watercraft on tax returns. These changes will be effective for indebtedness incurred after December 31, 2025.