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Old 12-20-2012, 01:11 PM   #1
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RV Interest Deduction

Yesterday I had an audit of a client by the IRS and one of the issues was the deduction of his motorhome interest. (For those of you who are not aware, you can take RV interest off on Schedule A as "Other Interest" as long as your RV has bathroom and kitchen capabilities.) The issue that was raised by the auditor was to ask the question about whether or not he had the original loan papers on the unit. The bank did send him a letter telling him how much interest he had paid, but it did not indicate that the interest was on a motorhome, only that it was an installment loan. For that reason the auditor could not determine if the interest would have been deductible.

If you are deducting your RV interest make sure that the loan papers or letter from your bank indicate that the interest is on your RV. In the unlikely event of an audit, this could save you a lot of hassles and some dollars.
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Old 12-20-2012, 01:16 PM   #2
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Thanks for the heads up. How many residences can you deduct ? I think it's two. I'm sure this info would be helpful to some.
Thanks
Cliff
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Old 12-20-2012, 01:24 PM   #3
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You are allowed to take the interest deductions on up to two residences. One would be your primary residence. On your primary residence the cap on the principal is $1 million. For a home equity, the cap is $125,000. If you have more than two stick and brick homes, you can take the taxes on all of them, but only the interest on two of them which includes your primary residence.
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Old 12-20-2012, 01:31 PM   #4
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While we're on the subject. How about the interest and taxes on an RV site that you own ?

Cliff
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Old 12-20-2012, 01:42 PM   #5
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My loan statement comes from US Bank - Northwest RV Marine. When the IRS questioned my interest deduction, US Bank sent a letter stating the loan was on an RV. That satisfied the IRS and I haven't heard from them again.
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Old 12-20-2012, 01:54 PM   #6
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While we're on the subject. How about the interest and taxes on an RV site that you own ?

Cliff
Cliff, both the taxes and the interest are deductible assuming you are only taking off the interest on one other residence. A lot of my clients rent out their RV lots and take the interest and taxes against the rental income. It would just go on Schedule E instead of the A and it wouldn't matter if you had two residences already.
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Old 12-20-2012, 02:03 PM   #7
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For us 'part timers' I understood that one must 'use' the MH for over 30 days in a year in order to qualify for this deduction. I am not sure if that still holds true but....
We keep track of all days that we use the MH just in case.
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Old 12-20-2012, 02:43 PM   #8
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For us 'part timers' I understood that one must 'use' the MH for over 30 days in a year in order to qualify for this deduction. I am not sure if that still holds true but....
We keep track of all days that we use the MH just in case.

There is no usage requirement for a second home. You could use it 300 days or no days. If you are renting your second home or RV and you are also using it then there are requirements about how much it is rented as opposed to how much it is used personally.
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Old 12-20-2012, 02:51 PM   #9
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While we're on the subject. How about the interest and taxes on an RV site that you own ?

Cliff

Cliff, I should expand on what you asked and my response. If you have a site in a resort like Outdoor Resorts, which also will rent your site when you are not using it, then you would deduct your interest and taxes as a rental property. You can still deduct your interest on your RV on Schedule A and take the rental taxes and interest on Schedule E. It is actually kind of a nice little tax shelter to work that angle.
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Old 12-20-2012, 02:53 PM   #10
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So you do or do not need a primary residence with interest or not, in order to deduct interest on a Motorhome? Say you live in an apartment - can you deduct the Motorhome interest. Or your stick and brick is paid off, can you deduct motorhome interest.

Thank you for the free tax advice.
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Old 12-20-2012, 03:03 PM   #11
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Cliff, I should expand on what you asked and my response. If you have a site in a resort like Outdoor Resorts, which also will rent your site when you are not using it, then you would deduct your interest and taxes as a rental property. You can still deduct your interest on your RV on Schedule A and take the rental taxes and interest on Schedule E. It is actually kind of a nice little tax shelter to work that angle.
Got it. Thanks for the clarification. I appreciate the info you have posted.

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Old 12-20-2012, 03:07 PM   #12
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So you do or do not need a primary residence with interest or not, in order to deduct interest on a Motorhome? Say you live in an apartment - can you deduct the Motorhome interest. Or your stick and brick is paid off, can you deduct motorhome interest.

Thank you for the free tax advice.

Steve, that's assuming you have enough in itemized deductions to hit the limit. If you don't have enough itemized deductions then the standard deduction will be more than your interest and the standard deduction will give you a better tax break.

Ed
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Old 12-20-2012, 04:06 PM   #13
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So you do or do not need a primary residence with interest or not, in order to deduct interest on a Motorhome?
No, you do not need a sticks & bricks house in order to deduct the interest on an RV (be it a motorhome, towable, truck camper, etc.). If you are a fulltime RVer with no other home than your RV, you can deduct the interest.

That is, as someone else mentioned, that you have enough total deductions that you can actually use the deduction rather than taking the standard deduction.
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Old 12-20-2012, 04:14 PM   #14
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No, you do not need a sticks & bricks house in order to deduct the interest on an RV (be it a motorhome, towable, truck camper, etc.). If you are a fulltime RVer with no other home than your RV, you can deduct the interest.

That is, as someone else mentioned, that you have enough total deductions that you can actually use the deduction rather than taking the standard deduction.
Thank you very much! One final question - If you live in an apartment on the beach - and are not full time - and your RV interest on you brand new Prevost exceeds the standard deduction - can you deduct the interest on the Prevost?
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