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Old 02-17-2016, 04:03 PM   #1
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Writing off interest

Canadian asking this "DUMB" question.

I have heard a lot of Americans talking about buying a MH
and writing off the interest.
Some have said if it is a second home you can do this.
Others have said it depends on which state you live in.

We cannot write off interest on our homes, RV's, or toys,
unless they are a business deduction.

Curious also as to the maximum length of finance term there is.
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Old 02-17-2016, 04:04 PM   #2
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It's deductible on Federal Taxes anywhere, state taxes may or may not be depending on their laws. Sales/use tax is usually deductible on Federal taxes too.

Business use may or may not make a difference too.

Don't know, I've only gotten 20 year loans on the MH's and have been deduction the interest for as long as I can remember.
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Old 02-17-2016, 04:05 PM   #3
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New, up to 20 years. Less for older units. You can write off the interest you pay on your motor home loan as long as you meet a few simple criteria, regardless of what state you live in as its written off on your federal income tax.
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Old 02-17-2016, 05:30 PM   #4
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The Canadians have it right.
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Old 02-17-2016, 06:57 PM   #5
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Yes, the US IRS allows the deduction of mortgage interest from your Federal Taxes, for both a primary home and a second home. Whether that same deduction is allowed by your home state, if your home state has an income tax, varies from state to state. Some states allow the same Federal deductions, some do not.
But the state tax rules have nothing to do with the Federal tax rules. You're entitled to the Federal deduction regardless of what state you live in.

To qualify for this home interest deduction, you must:
1) itemize your deductions (vs the std deduction)
2) the mortgage interest must be from a "secured" loan. meaning the loan must be specific to the home and the lender must have the right to repossess if the loan is in default. So interest from a general line of credit or an unsecured personal loan are not deductible for this situation.
3) the home in question must have sleeping, cooking & toilet facilities.
4) if you have more than one second home, only one qualifies for this deduction.
5) after 1987 your total home loan amounts must be under $1 million to qualify.
There is no time limit on the duration of the loan. however if you want to deduct the "points" associated with initiating the loan, there are some duration limits.
If you rent out the home or use it as a home office, there are additional limitations.
you can find all this in IRS Publ 936 https://www.irs.gov/publications/p93...link1000229900

Quote:
Originally Posted by luckyd View Post
Canadian asking this "DUMB" question.

I have heard a lot of Americans talking about buying a MH
and writing off the interest.
Some have said if it is a second home you can do this.
Others have said it depends on which state you live in.

We cannot write off interest on our homes, RV's, or toys,
unless they are a business deduction.

Curious also as to the maximum length of finance term there is.
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Old 02-17-2016, 07:15 PM   #6
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Thank you for the replies.
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Old 02-17-2016, 07:28 PM   #7
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One caution that you have to be aware of is the office in home deduction for an RV. There was a recent case that threw out the office in home in an RV because the RV did not have a dedicated office area. Any business deduction for an RV requires some very specific planning and circumstances so tax filer beware.
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Old 02-17-2016, 07:37 PM   #8
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Quote:
Originally Posted by barmcd View Post
New, up to 20 years. Less for older units. You can write off the interest you pay on your motor home loan as long as you meet a few simple criteria, regardless of what state you live in as its written off on your federal income tax.
Not true, we bought the 2009 Magna in 2015 and got a 20 yr loan and I was 68 at the time. A good credit score and lots of liquid assets helps too!
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Old 02-17-2016, 09:01 PM   #9
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Quote:
Originally Posted by Mr_D View Post
Not true, we bought the 2009 Magna in 2015 and got a 20 yr loan and I was 68 at the time. A good credit score and lots of liquid assets helps too!

You can't say "Not True" when you don't know how old a coach I was talking about. Would you agree that you can't finance a 2000 model for 20 years? Would you also agree that a 2000 model is an older coach? I was just providing a general statement about financing a coach. Generally speaking, you can finance a newer coach for longer than an older one. The exact year that changes is immaterial.
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Old 02-17-2016, 09:48 PM   #10
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This thread is not about loan length used vs new, folks. Please take that discussion to a separate thread & let's get back on topic.

Thanks,
Lori-
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Old 02-18-2016, 07:13 AM   #11
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One of the things we all need to be cautious about in this thread is that the OP is asking about CANADIAN tax law and I can tell you from experience that the tax laws in Canada are way different than they are in the US. I don't have any expertise in Canadian law and I would suggest the OP contact a Chartered Accountant in Canada or even Revenue Canada for his question.
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Old 02-18-2016, 09:43 AM   #12
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Funny how people read the same words differently. I read it as a Canadian who knew the Canadian tax rules. But was curious what the US tax rules were, after seeing different replies in other posts about the subject.
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Old 02-18-2016, 11:04 AM   #13
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You learn something new every day. I should have kept the note on my MH and paid off the car instead...
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Old 02-18-2016, 02:57 PM   #14
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Quote:
Originally Posted by Jim2 View Post
Funny how people read the same words differently. I read it as a Canadian who knew the Canadian tax rules. But was curious what the US tax rules were, after seeing different replies in other posts about the subject.
Agree.
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