Community Forums

Lennyzx11 · 08-05-2013, 05:42 AM

I've purchased a new travel trailer to be used for my lodging while working on the road.

1. Can I write the interest alone off the loan as a second home?

2. Is there any depreciation allowed on truck or trailer ?

3. Are upgrades to my truck (ie, towing mirrors and trailer brake controller) allowed as deductible expenses?

If there are any other ideas out there, please let me know. I plan on keeping a log book with this one and am looking to deduct as much as possible (within reason) as this was bought solely for use while working and NOT as a vacation home.

Thank you,
Lenny

HD4Mark · 08-05-2013, 06:04 AM

That all sounds reasonable to me but I am no expert. Honestly I would look into a tax guy (or gal). DW had rental property a long time ago and was recommended a tax service by a friend. He did a amended return for me and got back about four times what I paid him for the work. We have used him ever since. Check fees with a few different ones and I would stick with private firms not the giant ones you see on TV.

If you do decide to do your own you have the right idea keeping track of everything. We have been able to deduct the interest on loans for boats and MHs as second homes. They were recreational not business as in your case so the rules may be different.

Shadow520 · 08-05-2013, 06:18 AM

I am a (retiring) tax pro and I highly recommend you find a local tax pro to talk to. All of your questions are possible in the right circumstances. Your deductibility will depend on the nature of your work, how you're paid, whether or not you have a "tax home", and other specific factors.

I can say that as long as the TT has fully functioning bed, bath, and kitchen facilities, you should be able to deduct the interest as an itemized deduction for a second home. Keep in mind you can only deduct interest on 2 homes (so if you also have a lake-home or cottage, you can only deduct the 2 highest interest amounts). This is not dependent on your job or work. However, depreciation and other expenses are and require more information that I wouldn't recommend getting into on a public internet forum.

Do yourself a favor and consult a local pro.

wnytaxman · 08-05-2013, 07:08 AM

The interest on your RV is deductible as long as it has both a bathroom and a kitchen. The sales tax you may have paid on purchase is also deductible. Both deductions are based on the premise that you have enough deductions to itemize.

Any expenses beyond those two would have to assume some business usage for the RV. I have a few clients who use their trailers or motorhomes for business. Several use them exclusively for business in the oil and natural gas fields of Pennsylvania. Others use them predominately for business but also with some personal use. Either way, if you use the unit for business, you must be able to document and prove your business usage. Inspection receipts, campground fees, fuel receipts, toll receipts, and so on are things that must be saved in the event of an audit.

I hope this helps.

Ed

dons2346 · 08-06-2013, 12:08 AM

" The sales tax you may have paid on purchase is also deductible. "

The qualifying statement that should be made here is that in your case, if you are a Texas resident, the sales tax is deductible from your federal return.

A sales tax deduction does not apply to every state, only those that do not have a state income tax.

wnytaxman · 08-06-2013, 06:48 AM

Quote:

Originally Posted by dons2346

" The sales tax you may have paid on purchase is also deductible. "

The qualifying statement that should be made here is that in your case, if you are a Texas resident, the sales tax is deductible from your federal return.

A sales tax deduction does not apply to every state, only those that do not have a state income tax.

Sorry but that statement is inaccurate. You can deduct either the sales tax or state income tax paid, whichever is higher. For example, if I paid $5,000 in NYS income tax but $8,000 in sales tax (let's say I bought a new rig) I would take the sales tax deduction not the income tax. You get one or the other. If your state doesn't have an income tax then you would take the sales tax deduction, assuming you itemize.

JohnBoyToo · 08-06-2013, 09:20 AM

Good topic as I have the same questions AND...

The original dealer I bought mine from started his own finance company and financed ours... which was fine, but they didn't feel they needed to send us 1099's !

So I have no way of knowing interest paid to deduct...
How should I proceed ?

And what else is deductible as a second home - if no business use...

thanks in advance !

Shadow520 · 08-06-2013, 09:26 AM

Quote:

Originally Posted by JohnBoyToo

Good topic as I have the same questions AND...

The original dealer I bought mine from started his own finance company and financed ours... which was fine, but they didn't feel they needed to send us 1099's !

So I have no way of knowing interest paid to deduct...
How should I proceed ?

And what else is deductible as a second home - if no business use...

thanks in advance !

There is no requirement for them to send a 1098 as it isn't a mortgage. Usually you can look on your statements for the yearly interest paid amount, or call them and ask.

As for the deductions, only the interest (you would put it on the line for mortgage interest not reported on a 1098). You *might* be able to deduct the registration/plates as a personal property tax IF the fees are based on the value of the vehicle. This varies by state. Here in Michigan, anything model year 1984 or newer is value based, prior to that it was weight based. Or if your state has a separate personal property tax on the RV, you can deduct that as well.

Arch Hoagland · 08-06-2013, 09:41 AM

I deducted a portion of mine because I travelled to various parts of the country to repair computer systems and used the coach as a workplace.

But this was all done with the advice of my accountant who knew all the current rules and regulations.

You had best get a tax person to handle the deductions elsewise you can get in a bundle of trouble.

wnytaxman · 08-06-2013, 10:49 AM

Quote:

Originally Posted by JohnBoyToo

Good topic as I have the same questions AND...

The original dealer I bought mine from started his own finance company and financed ours... which was fine, but they didn't feel they needed to send us 1099's !

So I have no way of knowing interest paid to deduct...
How should I proceed ?

And what else is deductible as a second home - if no business use...

thanks in advance !

Shadow is correct on his/her comments, but I would like to answer your question about business use of a second home. You do not need any business use of a second home for you to deduct the interest paid on the mortgage of the second home. If fact, if you have a business use it would change where you would report any interest paid.

Also, as Arch said, get competent tax assistance before jumping off on anything that you are not familiar with. That would generally mean a CPA or tax attorney. Be careful of storefront part time tax preparers.

bdpreece · 08-06-2013, 10:58 AM

The advice to contact a tax pro is probably the best. We had some friends who used to write off depreciation on their 40 ft diesel motorhome and bragged about how they never had to pay any taxes. When they sold the motorhome the IRS then said the recovered depreciation was income and they got stuck with a huge tax bill.

JohnBoyToo · 08-06-2013, 11:01 AM

Agree and will be doing that as we were fortunate enough to get an inheritance that is somewhat complicated (from multiple states etc...)
and that will require an advisor anyway...

just like to know what type of bait the fish in that water like, before I jump in

thanks again !

wnytaxman · 08-06-2013, 01:16 PM

Quote:

Originally Posted by JohnBoyToo

Agree and will be doing that as we were fortunate enough to get an inheritance that is somewhat complicated (from multiple states etc...)
and that will require an advisor anyway...

just like to know what type of bait the fish in that water like, before I jump in

thanks again !

The IRS waters are pretty much shark infested, so caution is advised. We have found the IRS to be much more difficult to deal with in the last few years. We joke that they have hired some of the finest French and Music majors to ever come out of college. Many of the new auditors we are dealing with are poorly trained and many also have an ax to grind against anyone whom they dislike. Caution is extremely important in this day and age.

Christian51 · 08-06-2013, 06:30 PM

If you have your own business I would let it make the purchase. I'm looking into setting up an LLC which would provide me with what I need to travel and do the paintings I want. As an artist it is a tool so I assume everything about it will be deductible. Least that is what I've been told and I'm leaving it up to my handlers to guide me through that. If you don't have a formal business, then the second home approach is your avenue. I would look into how your business arrangements are set up and you may find some changes would bring some benefit. Again, you need some expert advice but maybe not just an accountant who will tell you what you can deduct and can't. But a business attorney would have a different perspective and understand a lot more about arranging a business to your benefit over all.