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Old 02-15-2012, 08:37 AM   #1
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Tax deductions

I purchased a new motorhome this year. I know (think) I can deduct the interest on the loan, what about the sales tax. I do not use an accountant. I live in GA if that makes a difference, which I do not think it does. Thanks.
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Old 02-15-2012, 08:45 AM   #2
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I deduct the interest on federal and state sales tax also for 2011..
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Old 02-15-2012, 08:57 AM   #3
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Along with sales tax and interest, you can deduct any personal property/excise tax you may have paid. Not all states charge this.
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Old 02-15-2012, 09:15 AM   #4
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I also live in the State Of Georgia and I deduct the sales tax, ad valorem tax, tag fees and interest.

Since you didn't mention Ad Valorem tax you obviously haven't reached your first tag renewal date in Georgia yet. You better be sitting down when you get that renewal notice from the county. I pay $3000+ in ad valorem tax each year.
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Old 02-15-2012, 04:16 PM   #5
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Jrf4865.......You can deduct the motor home interest as a second home. Your stick and brick house would be your first, the motor home wold be your second. If you have another property, such as a mountain cabin that you have a mortgage on, you would have to decide which one you would use as the second home deduction.....obviously the one with the most interest.

When you pay your house payment, the mortgage company tracks your interest and sends an interest statement to the IRS. On the motor home loan, no statement will be sent to the IRS, consequently they may question the deduction. I use Turbo Tax and when I enter the motor home interest, I include a very detailed description that includes (motor home interest, year, make model, bank name and account number).

A lot of states give you a standard deduction for sales tax and in most instances, you spend less than they allow. The year I bought my motor home, I spent susbstantially more money on sales tax than California's base deduction. I keep every receipt I receive. That year I totalled the sales tax on EVERYTHING.

A portion of your license fee should also be deductible. Mike Canter explained what sounds like a property tax on RV's in your state. California did away with this a few years ago (surprising for the Republic of California), but this tax is also deductible.
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Old 02-15-2012, 05:29 PM   #6
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Quote:
Originally Posted by Jrf4865 View Post
I purchased a new motorhome this year. I know (think) I can deduct the interest on the loan, what about the sales tax. I do not use an accountant. I live in GA if that makes a difference, which I do not think it does. Thanks.
For the 2011 tax year, sales tax was deductable. That deduction has expired and is not deductable this year into the future. Take a look at the 2012 Form 1040-ES for the details. At the bottom of page 2 under Expiring Tax Benefits you will find the line item saying the sales tax is no longer deductable.

"Deduction for state and local sales taxes instead of state and local income taxes."
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Old 02-15-2012, 08:52 PM   #7
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I also live in the State Of Georgia and I deduct the sales tax, ad valorem tax, tag fees and interest.

Since you didn't mention Ad Valorem tax you obviously haven't reached your first tag renewal date in Georgia yet. You better be sitting down when you get that renewal notice from the county. I pay $3000+ in ad valorem tax each year.
I think that "tag fees" are not deductible, ie they are not Interest nor a Tax.
You can/will get away with deducting them until you are audited - maybe never.

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Old 02-15-2012, 09:02 PM   #8
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According to the tax software I have used forever it specifically states that tag fees are deductible. Like you said even if it wasn't you probably wouldn't get audited for it
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Old 02-15-2012, 09:09 PM   #9
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Quote:
Originally Posted by Mike Canter View Post
I also live in the State Of Georgia and I deduct the sales tax, ad valorem tax, tag fees and interest.

Since you didn't mention Ad Valorem tax you obviously haven't reached your first tag renewal date in Georgia yet. You better be sitting down when you get that renewal notice from the county. I pay $3000+ in ad valorem tax each year.
Sounds like a real good reason, if you don't absolutely have to be there, to live some place else.
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Old 02-15-2012, 10:19 PM   #10
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I am working on my Montana LLC. Waiting for a permission letter from the bank right now and Georgia don't care. Georgia tax assessor made a mistake on my MSRP value of the MH. I contacted Monaco and got the original window sticker and applied for a correction to the state. They admit that they are wrong but will not change it. So Montana LLC here I come.
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Old 02-15-2012, 10:45 PM   #11
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Quote:
Originally Posted by PHESPE View Post
I think that "tag fees" are not deductible, ie they are not Interest nor a Tax.
You can/will get away with deducting them until you are audited - maybe never.

PHESPE
Depends on the state - in California a portion of the registration fees are, in fact, deductible. The form the state sends out when it's time to renew even itemizes the fees and states which one is deductible.
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Old 02-15-2012, 11:08 PM   #12
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You can deduct your interest on your stick and bricks and on your motorhome as a second home for both federal and state as long as you are not already deducting a second home.

You also can take the standard state sales tax deduction or the actual tax you paid if it's higher than than the standard deduction. The sales tax deduction is available if you are filing your 2011 taxes. It, as of now, is not available for 2012 taxes that you will file in 2013, however congress may vote to extend it.

You can also deduct you Georgia ad valoreum tax, which is essentially a personal property tax.
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Old 02-15-2012, 11:42 PM   #13
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Some of the confusion, if there is any, is with respect to the fact that vehicle registration fees that are calculated as a function of vehicle value are considered personal property taxes and are deductible, but other registration fees are not.

The following is from IRS publication 17- Your Federal Income Tax:

For example, a yearly tax based on value qualifies as a personal property tax even if it is called a registration fee and is for the privilege of registering motor vehicles or using them on the highways.
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Old 02-15-2012, 11:48 PM   #14
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This is the information that WNYTAXMAN put out on another site. He is talking only about preparing the Federal Return and not a State Return: I have tried to add clarification to his comments in the ( ).

"As a CPA, perhaps I can answer your questions. First off you can deduct the interest on your RV as a second home providing you don't already have a second home that you are deducting the interest on. Second thing to look at is how much sales tax did you pay on your rig when you bought it. If that sales tax plus the tax from the sales tax tables is more than what you paid in state income tax (withholding and estimated state taxes and any State Income Tax payments in the current year for the prior years) then you can take the sales tax (but not the state income tax payments-you get the large of the two, Sales taxes or withholding taxes, but not both).

One hint for you though. Do not show the interest on your RV on the mortgage interest line on Schedule A. Show it as other mortgage interest not reported on a 1098. This should keep you from getting a friendly letter from the IRS.

As far deducting the RV cost, you would have to show some business or rental purpose to take off any of the cost of the RV itself. If you do go that route, be aware that some of the use of the RV will be personal so you can't take the whole thing unless you don't use it personally at all. "
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