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Old 03-11-2015, 03:15 PM   #29
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There was a new federal court decision last year that determined you cannot deduct costs of an RV as a business deduction. They say that if you spend even one night in the RV or cook one meal then it is being used for personal use and you cannot prorate the expenses for that month.
I have seen a few court cases involving RV's but not this one. Could you please let me know where you saw this one or the site for it.

I am familiar with a case where the taxpayer said that they had an office in the RV and deducted it under the office in home rules. They got shot down because there was no place within the RV that was "exclusively" office. Could this be the case you are thinking of?
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Old 03-11-2015, 05:29 PM   #30
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Originally Posted by wnytaxman View Post
I have seen a few court cases involving RV's but not this one. Could you please let me know where you saw this one or the site for it.

I am familiar with a case where the taxpayer said that they had an office in the RV and deducted it under the office in home rules. They got shot down because there was no place within the RV that was "exclusively" office. Could this be the case you are thinking of?
I've seen bunk house conversion which where it was converted to an office so it can be done.

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I was for a flat tax or the fair tax until a couple of years ago when I looked at my taxes. After all deductions I was paying less than 5% so I quit talking.
I noticed this now that we're retired. Since we still have a mortgage we can easily control how much we pay in taxes. It doesn't take much and we can end up paying next to nothing in Federal or State taxes. I figure that makes up for all of the taxes we payed before we retired.

I don't think this is uncommon with many retired people and of one changed the system now without adjust for that it could cause major social and economic issues. Major changes such as this have to be phased in over a period of many years.
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Old 03-11-2015, 06:21 PM   #31
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If a consumption tax is set up proper there would be no "hardship" caused by it, basic food stuffs, medications exempt. A consumption tax is different than a sales tax, in Canada, the GST taxes apply anytime money changes hands, not just on merchandise, the PST only applies merchandise (I think but may be wrong)

I agree with the premise that if you don't contribute (pay taxes) you should have no vote in how it's spent, guarantee the political landscape would change drastically.

And even if you raise the percentage of taxes the rich pay, they will hire lawyers and buy politicians to get out of it.... exercise in futility.
The GST is the Federal Tax in Canada and it is 5% across the Nation. Basically applies to all Goods and Services.
PST or provincial sales tax is different for each Province and can be implemented differently as well. In BC where I live, it is 7% In Alberta, right next door, they have no Provincial Sales tax at all but the Provincial component of their Income tax is higher than in BC. Other provinces are at 7.5% and so on.

Some provinces have amalgamated their taxes with the gst and get what is called HST or a harmonized sales tax. Easier for retailers and businesses to deal with, somewhat cheaper to administer but basically works out to the same thing.

PST has exemptions in BC on basic food stuffs, haircuts??? school supplies I think. It has been a long time since I looked at it in detail. I usually just bank on paying 12% on top of what I buy. Those I don't mind. It is all the additional taxes on things like fuel that rails the price to about 5$ per gallon that really tick me off when 10 miles south as the crow flies, it is way cheaper.

One thing I will say is that it is my impression that the wealthy here have a far less easy time evading the tax man. Their rates are higher and Revenue Canada doesn't miss many tricks that crop up for trying to evade. Even if it is a legal loophole, they will usually be fairly quick to close it if they find they are losing to much tax revenue as a result. I don't hear of many Mitt Romney situations up here where people making multi-millions get away with an effective tax rate of 20-25%. It is more like 50% in Canada. What you do hear about is people trying to hide money offshore.
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Old 03-11-2015, 07:49 PM   #32
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The idea of a consumption tax is something that has been kicked around for years. As the previous poster mentioned it has been a Canadian revenue raiser for years. If you want to see the effect that it can have stop by any mall near the border on a weekend and see how many Canadian shoppers are in those malls. On a Saturday and Sunday you will find close to half the shoppers are Canadians in large Buffalo malls like the Galleria. The Waterloo Outlet Mall west of Syracuse has their announcements in English and in French for the shoppers from Quebec. It's great for us in WNY but the Canadian tax folks come out short on these deals.

One of the biggest problems with the consumption tax is the use of exemptions. You already mentioned that food should be exempt, but what about charities, non-profits and churches? Should they pay it also? Add to it the blank check that politicians will see when it comes time for more revenue for someone's pet project or social program and up goes the rate. Our sales tax was to be temporary and now we are just under 9%. Like the lottery and the toll road, there are lots of places to spend money that the taxpayers don't even realized they are getting hosed and a consumption tax, like the sales tax is great source of revenue without a lot of repercussions from the voters.
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Old 03-11-2015, 07:55 PM   #33
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The interest you pay on a motor home loan can be deducted in some cases just like interest on a home mortgage if the motor home is considered a second home. There are requirements but for some with large RV loans it would be worth looking into.
I've been doing that for well over 25 years now with never a question from the IRS. The RV does have to meet certain criteria like a toilet and kitchen though.
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Old 03-12-2015, 08:52 AM   #34
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See http://www.ustaxcourt.gov/InOpHistor...ry.TCM.WPD.pdf for the case. Pages 13 and 14 seem to make the main point. They state "Our finding above that petitioners had some personal use of the RV is fatal to their position. Any personal use, including watching TV in the RV, makes the entire day a personal day. Petitioners therefore used the RV as a dwelling unit for personal purposes for more than 14 days, and section 280A prohibits them from taking any deductions with respect to the RV."
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Old 03-12-2015, 09:30 AM   #35
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See http://www.ustaxcourt.gov/InOpHistor...ry.TCM.WPD.pdf for the case. Pages 13 and 14 seem to make the main point. They state "Our finding above that petitioners had some personal use of the RV is fatal to their position. Any personal use, including watching TV in the RV, makes the entire day a personal day. Petitioners therefore used the RV as a dwelling unit for personal purposes for more than 14 days, and section 280A prohibits them from taking any deductions with respect to the RV."

Doug, this is the same logic they use to eliminate the losses taken on vacation property. It's called the 14 day rule. The guy deducted his motorhome based on his business which was selling RV insurance to fellow RVers. They threw out the deductions based on the fact that he used the RV for vacationing for several months of the year.

There was another case where the couple was taking the deduction based on the office in home deduction that got thrown out, but my own opinion is that they used the wrong part of the code for the write off. They also used the RV for transportation and working in a remote location. I would have probably looked to taking the deduction for the transportation to the location and the use of it as a dwelling unit while performing work in a remote location. Just a different approach.
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Old 03-13-2015, 07:11 AM   #36
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The one biggest rule with any deduction is a fairly simple one....Pigs get fat and hogs get slaughtered. Most of the problems that I see with any deduction, and not just RV's, is that people get greedy. Can someone take some deductions for the use of an RV for business? Yes, if they have the right circumstances, but they have to use common sense and not get greedy and try to take everything. This applies to charitable deductions, business expenses and anything that the IRS does not get direct verification of. Things like mortgage interest and state income taxes are pretty easy for the government to verify, but business expenses, charitable deductions and the like are not. To paraphrase the old adage, Tax filer beware!
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