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Old 01-02-2014, 01:59 PM   #1
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RV Loan Interest Tax Deductible?

I have heard two things (I live in PA):

- RV loan interest payments are not tax deductible because the RV is mobile (from my tax preparer)
- RV loan interest payments are tax deductible as the RV has a bathroom (from an acquaintance who works for the IRS and is an RVer)

I would appreciate any definitive knowledge anyone might have to offer on this topic.

Thanks!
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Old 01-02-2014, 02:11 PM   #2
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Not an expert but it is my understanding that if you take your S&B interest then you cannot take the MH interest. Just like having a vacation house you can only claim your primary residence.
If you do not claim your S&B or do not have one then you you can use the RV as a tax deduction.
I'll know later this year when I turn everything over to our accountant.
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Old 01-02-2014, 02:12 PM   #3
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I researched this when we sold our house and went full time a couple of years ago. What I was told was that if the RV has cooking, sleeping and bathroom facilities then the interest is tax deductible. In our case, all of the interest since it is our primary residence. For non full timers an RV can be claimed as a second or vacation residence. DISCLAIMER: I am not an attorney or tax professional. Just repeating what I was told, and have used in preparing my tax returns for 2 years now.
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Old 01-02-2014, 02:13 PM   #4
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We have deducted the loan interest on our RV for the last three tax seasons, and will do so again this year. The RV is considered a second home for tax purposes.

However, I am not an attorney or accountant, so I'd call the IRS helpline if you're concerned. I would call sooner rather than later, as wait times go up significantly as it gets closer to April 15.

http://www.lowrvfinancing.com/articl...eductible.html
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Old 01-02-2014, 02:16 PM   #5
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brdickson, that is also my understanding. jrsmustang, I would find a new tax person! :-)
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Old 01-02-2014, 02:17 PM   #6
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I have always deducted my boat or RV interest as they qualified as a second home. I would ditch your tax preparer and find another one or use Turbo Tax for much less money.
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Old 01-02-2014, 02:21 PM   #7
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From irs.gov website:
Quote:
If you are a homeowner who received assistance under a State Housing Finance Agency Hardest Hit Fund program or an Emergency Homeowners' Loan program, see Pub. 530 for the amount you can deduct on line 10 or 11.

A home mortgage is any loan that is secured by your main home or second home. It includes first and second mortgages, home equity loans, and refinanced mortgages.
A home can be a house, condominium, cooperative, mobile home, boat, or similar property. It must provide basic living accommodations including sleeping space, toilet, and cooking facilities.
Limit on home mortgage interest. If you took out any mortgages after October 13, 1987, your deduction may be limited. Any additional amounts borrowed after October 13, 1987, on a line-of-credit mortgage you had on that date are treated as a mortgage taken out after October 13, 1987. If you refinanced a mortgage you had on October 13, 1987, treat the new mortgage as taken out on or before October 13, 1987. But if you refinanced for more than the balance of the old mortgage, treat the excess as a mortgage taken out after October 13, 1987.
See Pub. 936 to figure your deduction if either (1) or (2) next applies. If you had more than one home at the same time, the dollar amounts in (1) and (2) apply to the total mortgages on both homes.
  1. You took out any mortgages after October 13, 1987, and used the proceeds for purposes other than to buy, build, or improve your home, and all of these mortgages totaled over $100,000 at any time during 2013. The limit is $50,000 if married filing separately. An example of this type of mortgage is a home equity loan used to pay off credit card bills, buy a car, or pay tuition.
  2. You took out any mortgages after October 13, 1987, and used the proceeds to buy, build, or improve your home, and these mortgages plus any mortgages you took out on or before October 13, 1987, totaled over $1 million at any time during 2013. The limit is $500,000 if married filing separately.

So the answer is yes you can deduct, as long as it's within the IRS limits.

We used to deduct both our home mortgage interest & our RV interest on our tax returns.

Lori-
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Old 01-02-2014, 02:31 PM   #8
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from NLOVNIT:
So the answer is yes you can deduct, as long as it's within the IRS limits.

We used to deduct both our home mortgage interest & our RV interest on our tax returns.

As we have. our cpa does ours so we defer to her and her knowledge.
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Old 01-02-2014, 02:42 PM   #9
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Hire a good accountant!

Different States have different regulations and tax rules and regulations are changing all the time. HIRE A GOOD ACCOUNTANT AND FINANCIAL ADVISER!

In fact, if in your previous life you were one of these, here is what my accountant had to say to me. (Don't take anything as documented facts, HIRE YOURSELF A LICENSED PROFESSIONAL.)

  1. You are a freelancer, as long as you earn an income and can document it at each and every location you stop, you can deduct lot fees, fuel and depreciation of the coach.
  2. I asked "How much do I have to earn", he says you need one documented source of "earned income" aka a receipt for services and or goods. You can earn as little as a penny, but "keep it real".
  3. Get an LLC, purchase and or transfer the rig to the LLC, get business license in the state and town you call your home base. Make sure they know your business is in your MH and that it is mobile.
  4. You might have to call around to a few insurance companies because even though you will not be transacting business out of the inside of your MH, (do it on the porch) some don't like to give a personal policy to an LLC owned rig doing business.
  5. If you like to forum post, YOU NEED TO BLOG. This shows you are offering "service". Include "reviews" or "trip reports" to include photos of your journey down the road. This provides time stamped documentation that the "service portion" of your mobile business is extending a service to others. Make sure your website provides some type of way to earn revenue, this site uses advertisements. For tax purposes, they don't care if you earn a profit, if you earn anything, just that you have the option and hope that this blog will "make me rich one day" lol.
  6. Ladies, you have skills that others might not have. Maybe you are great at cooking, BBQ, organizing interior spaces, maybe just how to make a good cup of coffee or iced tea. Network with each other, teach an "iced tea" workshop, charge everyone $1.00 and spend the afternoon laughing and drinking iced tea as the workshop indicates. Give everyone a receipt and make sure they all fill out a questionnaire on "How did I do".
Your tax professional and or financial adviser...(I bet some of you did this prior to retirement and wouldn't mind giving an hour workshop once per month) can advise you on the ins and outs.



The point is not to avoid paying your taxes at all. In fact, you want to make sure you pay your taxes and you want to make sure you are paying your taxes according to documented and official regulations. THIS MEANS KNOW THE INS AND OUTS OF SAID DOCUMENTED AND OFFICIAL REGULATIONS. Knowing the ins and outs of tax regulations simply allows you to maximize the benefits you receive from paying your taxes.


You want to economize your investments, your MPG and your tax liability right? So know what you can do to get more bang for your mobile business buck.


~Gdogs Wife
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Old 01-02-2014, 03:01 PM   #10
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Quote:
Originally Posted by virginiamtns View Post
We have deducted the loan interest on our RV for the last three tax seasons, and will do so again this year. The RV is considered a second home for tax purposes.

However, I am not an attorney or accountant, so I'd call the IRS helpline if you're concerned. I would call sooner rather than later, as wait times go up significantly as it gets closer to April 15.

Is the Interest on Your RV Loan Tax Deductible

I agree. My CPA always deducted the interest on the RV.
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Old 01-02-2014, 03:29 PM   #11
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First off, your RV interest is definitely deductible as long as you are not already taking a deduction for the interest on a second home. If you are already taking that deduction, then you can take whichever deduction is higher.

One caution is that you take the deduction on the "Other Interest" line of your Schedule A, not on the Mortgage Interest line. Indicate the name of the bank or financing company and state RV Interest. You may get a letter from the IRS to clarify that it is in fact a second home, but that should be all that will be required.

Be careful about taking a business deduction for an RV. A recent Court case had an RVer lose his deductions for his "business use" when he did not have a separate area in his motorhome for his office. He seemed to meet all the other requirements, but got shot down under the office in home rules.

Ed
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Old 01-02-2014, 03:54 PM   #12
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Yes, if you use the 1040 form as a second home. Yes, it may be limited based on your income under the Alternative Minimum Tax.

Disclaimer: I'm not a tax expert but think I should be as long as I've been doing this.
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Old 01-02-2014, 06:24 PM   #13
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Quote:
Originally Posted by Gdogs View Post
Different States have different regulations and tax rules and regulations are changing all the time. HIRE A GOOD ACCOUNTANT AND FINANCIAL ADVISER!

In fact, if in your previous life you were one of these, here is what my accountant had to say to me. (Don't take anything as documented facts, HIRE YOURSELF A LICENSED PROFESSIONAL.)

  1. You are a freelancer, as long as you earn an income and can document it at each and every location you stop, you can deduct lot fees, fuel and depreciation of the coach.
  2. I asked "How much do I have to earn", he says you need one documented source of "earned income" aka a receipt for services and or goods. You can earn as little as a penny, but "keep it real".
  3. Get an LLC, purchase and or transfer the rig to the LLC, get business license in the state and town you call your home base. Make sure they know your business is in your MH and that it is mobile.
  4. You might have to call around to a few insurance companies because even though you will not be transacting business out of the inside of your MH, (do it on the porch) some don't like to give a personal policy to an LLC owned rig doing business.
  5. If you like to forum post, YOU NEED TO BLOG. This shows you are offering "service". Include "reviews" or "trip reports" to include photos of your journey down the road. This provides time stamped documentation that the "service portion" of your mobile business is extending a service to others. Make sure your website provides some type of way to earn revenue, this site uses advertisements. For tax purposes, they don't care if you earn a profit, if you earn anything, just that you have the option and hope that this blog will "make me rich one day" lol.
  6. Ladies, you have skills that others might not have. Maybe you are great at cooking, BBQ, organizing interior spaces, maybe just how to make a good cup of coffee or iced tea. Network with each other, teach an "iced tea" workshop, charge everyone $1.00 and spend the afternoon laughing and drinking iced tea as the workshop indicates. Give everyone a receipt and make sure they all fill out a questionnaire on "How did I do".
Your tax professional and or financial adviser...(I bet some of you did this prior to retirement and wouldn't mind giving an hour workshop once per month) can advise you on the ins and outs.



The point is not to avoid paying your taxes at all. In fact, you want to make sure you pay your taxes and you want to make sure you are paying your taxes according to documented and official regulations. THIS MEANS KNOW THE INS AND OUTS OF SAID DOCUMENTED AND OFFICIAL REGULATIONS. Knowing the ins and outs of tax regulations simply allows you to maximize the benefits you receive from paying your taxes.


You want to economize your investments, your MPG and your tax liability right? So know what you can do to get more bang for your mobile business buck.


~Gdogs Wife
Here is the thread that discusses the "business deduction" for an RV. It may clarify for some the potential uses and problems of an RV business deduction.

Motorhome Business Deduction
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Old 01-02-2014, 07:31 PM   #14
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For my S&B home mortgage, the bank provided a form 1098 with all the interest details. My motorhome was financed through a credit union, which did not provide the form 1098 because it considered it a vehicle loan, not a mortgage. The interest was deductible and IRS rules allow for this and specifically discuss how to enter mortgage interest for your second home when a form 1098 is not provided...
IRS pub 936 applies.( Publication 936 (2013), Home Mortgage Interest Deduction )

I've used HR Block tax software for years and it is quite simple...it asks all the right questions. (I'm sure all the tax prep software is similar)
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