Deductible interest?

[MichaelInNM]

Can someone BS check me? A sales guy told me if we buy a class a new we can deduct 100% of the loan interest as a second home, but that we cannot if we buy used. Called it a ‘millionaire exception’?

I smell shenanigans but wanted to ask experts.

[happy2rv]

I'm not a tax expert, but I don't believe there is any difference in the deduct-ability of interest for new vs used. I believe, assuming you have enough deductions to meet the itemization threshold, you can deduct the interest on any RV as a second home.



This would apply to Class A, Class B, Class C, travel trailers and fifth wheels, but not to the tow vehicles for trailers.



For the real answer, seek the advice of a tax professional. However, I think the salesman is full of something...

[Tax_Man]

Your BS detector is working. If you can itemize on Schedule A, or what ever form in use to deduct mortgage interest, you can. The MH/TT/5er is considered a 2nd home for the deduction. Does not matter new or used. (I am an enrolled agent, retired IRS).

[vsheetz]

New or used doesn't matter...
Salesman...

[NLOVNIT]

Never believe the salesperson. They don't know what they're talking about 101% of the time.

Lori-

[waterman480]

So he sells you a rig with a 20 year note that you can deduct the interest on, but they won't service after 10 years and you'll be upside down when you walk out the door.


Deduction is nice -IF you can use it. Make a big down payment and a short term note, and at least you won't have to pay to get out of it later. (Cash is even better)

[barmcd]

Yeah, used or new doesn't make a difference, it's still deductible.

[mtofell]

In order to deduct 2nd home (or RV) interest you MUST file schedule A and itemize your deductions. A few years ago with some tax changes it became less advantageous to do this and roughly 90% of people currently DON'T itemize. I'm not sure what the previous mark was but I think it was a lot higher.

Here's some info: https://www.investopedia.com/terms/s/schedulea.asp

[theroc]

He may have been making the distinction between a secured loan versus a personal loan. Sometimes, secured loans on a used RV are more difficult to find a lender and must be done through a personal loan. A personal loan is not deductible where a secured loan would be. If the dealership is arranging financing, it will definitely be a secured loan.

But I'm just guessing that he may have been making that distinction. I'm with others who are offering that the vast majority of salesman will be feeding you BS of some type.

[Redapple]

I think the only stipulation is you need to spend a minimum of 21 days a year in it.

[Ray,IN]

Originally Posted by mtofell

In order to deduct 2nd home (or RV) interest you MUST file schedule A and itemize your deductions. A few years ago with some tax changes it became less advantageous to do this and roughly 90% of people currently DON'T itemize. I'm not sure what the previous mark was but I think it was a lot higher.

Here's some info: https://www.investopedia.com/terms/s/schedulea.asp

YUp, It's almost impossible if you have health insurance or major expenses, as that is the biggest item to qualify you for itemizing your federal taxes. If you don't itemize your federal you can't itemize state taxes either where I live.

[bigchick]

it's been stated several times already. but this statement is true only if you itemize your deductions! if you take the newly increased standard deduction then this is not even a factor. new or used is not a factor.

[lrgomez1976]

As for the IRS, as long as it has a Kitchen, Bath, and Sleeping area the interest is deductible no matter if new or used.

[Mr_D]

Originally Posted by Redapple

I think the only stipulation is you need to spend a minimum of 21 days a year in it.

That is not a requirement. It does have to have a kitchen, bath and sleeping space as stated above.