Tax Implications of Making RV Our Primary Residence

[BOBNBONNIE]

Mr_D,
Are you still in Vancouver? We had thought of moving that direction. Camas, Wasougal, Vancouver of that general area. We have not spent too much time investigating but Washougal had a camping club that could be a permanent fixed address for not much cash. Just had to be gone about two to three months per year per club rules.

[BillJinOR]

Originally Posted by masdixdragon

What about mortgage interest deductions (as a primary residence)? Is that still possible now or no?

According to our tax Gal ..Yes in our case the MH becomes your primary home. but You have to have less than 750000 borrowed combined 1st and 2nd home.Truth is most Rv loans wont have enough interest to excced the std 24,000 deduction.

[BOBNBONNIE]

masdixdragon,
I believe the interest is still deductible but we don't have a mortgage. And because our MH is older the interest deduction on a refinance would be much less than the standard deduction.

[TXTiger]

Many are making this much more complicated that it is. You don’t need a physical address or a motorhome to establish your domicile. You only need an address. Any address. A P.O. Box in TX, FL, or SD are commonly used. You can use any State you want, however some States do require a physical address and won’t recognize a P.O. Box.

The only effect on income taxes of your choice of State for you domicile is on the sales tax when you purchase and the annual registration fee. If you do not have a sticks and bricks house you will not be paying property taxes so the annual registration fee is an offset. A non tax issue is also the cost of vehicle insurance and health insurance.

As far as income tax, the new standard deduction is double past years so you will probably not itemize so the interest you pay is moot. If you do itemize you can deduct the interest from your motorhome loan. Also the State Tax deduction (property tax, sales tax, registration etc) is not being eliminated it is being capped at $10,000 but again if you don’t itemize it is moot.

As far as income, any income you earn in your domicile State will be taxed in that State. Any income you earn in another State will be taxed in the State it was earned in. This is regardless of living in a motorhome or house.

Choose a State you want as your domicile, get a legal address in that State and hit the road and enjoy the RV lifestyle.

[Jeff6146]

Originally Posted by Finance

With few restrictions, you can declare your domicile in any state you wish. Suggest you search and read about the tax implications. Florida and Texas are popular.

Texas is very popular. Also great veteran benefits, probably the best in the US. And i was told that sales tax was deductible. I’m assuming only the first year.

[Jeff6146]

Originally Posted by BillJinOR

According to our tax Gal ..Yes in our case the MH becomes your primary home. but You have to have less than 750000 borrowed combined 1st and 2nd home.Truth is most Rv loans wont have enough interest to excced the std 24,000 deduction.

See we are here in Texas and there is no state tax, and I’m 100% VA disabled so we don’t pay for a lot of stuff. Like tolls, property tax, fishing licenses, hunting license, and a whole bunch more. We paid cash for our RV, $35K. I was told that we could take the interest off on our taxes.

[Jeff6146]

Originally Posted by TXTiger

Many are making this much more complicated that it is. You don’t need a physical address or a motorhome to establish your domicile. You only need an address. Any address. A P.O. Box in TX, FL, or SD are commonly used. You can use any State you want, however some States do require a physical address and won’t recognize a P.O. Box.



The only effect on income taxes of your choice of State for you domicile is on the sales tax when you purchase and the annual registration fee. If you do not have a sticks and bricks house you will not be paying property taxes so the annual registration fee is an offset. A non tax issue is also the cost of vehicle insurance and health insurance.



As far as income tax, the new standard deduction is double past years so you will probably not itemize so the interest you pay is moot. If you do itemize you can deduct the interest from your motorhome loan. Also the State Tax deduction (property tax, sales tax, registration etc) is not being eliminated it is being capped at $10,000 but again if you don’t itemize it is moot.



As far as income, any income you earn in your domicile State will be taxed in that State. Any income you earn in another State will be taxed in the State it was earned in. This is regardless of living in a motorhome or house.



Choose a State you want as your domicile, get a legal address in that State and hit the road and enjoy the RV lifestyle.

I know I work on the pipeline and we pay taxes according to our state. That’s why a lot work here in Texas, they see that they don’t pay taxes here and make this their home of record. They just get a P.O. Box.

[Mr_D]

Originally Posted by BOBNBONNIE

Mr_D,
Are you still in Vancouver? We had thought of moving that direction. Camas, Wasougal, Vancouver of that general area. We have not spent too much time investigating but Washougal had a camping club that could be a permanent fixed address for not much cash. Just had to be gone about two to three months per year per club rules.

Have only lived here for 71 years now. I don't know of any camping club in Washougal though.

[Mr_D]

Originally Posted by BillJinOR

According to our tax Gal ..Yes in our case the MH becomes your primary home. but You have to have less than 750000 borrowed combined 1st and 2nd home.Truth is most Rv loans wont have enough interest to excced the std 24,000 deduction.

The standard deduction works great UNLESS you'd widowed, then it's half the married deduction. That hurt me pretty badly this year. 1/3rd less income and paid $3,000 more in taxes.

[twogypsies]

Originally Posted by TXTiger

Many are making this much more complicated that it is. You don’t need a physical address or a motorhome to establish your domicile. You only need an address. Any address. A P.O. Box in TX, FL, or SD are commonly used. You can use any State you want, however some States do require a physical address and won’t recognize a P.O. Box.

The only effect on income taxes of your choice of State for you domicile is on the sales tax when you purchase and the annual registration fee. If you do not have a sticks and bricks house you will not be paying property taxes so the annual registration fee is an offset. A non tax issue is also the cost of vehicle insurance and health insurance.

As far as income tax, the new standard deduction is double past years so you will probably not itemize so the interest you pay is moot. If you do itemize you can deduct the interest from your motorhome loan. Also the State Tax deduction (property tax, sales tax, registration etc) is not being eliminated it is being capped at $10,000 but again if you don’t itemize it is moot.

As far as income, any income you earn in your domicile State will be taxed in that State. Any income you earn in another State will be taxed in the State it was earned in. This is regardless of living in a motorhome or house.

Choose a State you want as your domicile, get a legal address in that State and hit the road and enjoy the RV lifestyle.

This ^^^^^^^ is all you need to know. When you sell your house you'll need an address and most full-timers get a mail forwarding company which will give you a 'street' address, not a P.O. Box. We used the Escapees RV Club's mail forwarding which was awesome.

You're overthinking all of this. You don't need to buy any property to get an address.

As I read your post you state you are going to do a cross-country tour in 4 months' time to see if full-timing is for you. This definitely will not give you any idea of what full-timing is like. You're going to be traveling too fast and putting on too many miles. You're going to be rushed and exhausted after 4 months.

Many seasons during our full-timing we'd stay in one or two states during 4 months and check out every nook and cranny of those states. You'll save fuel costs and it will be much more relaxing. We also used national forest camping and other public parks and most of the time just boondocking on public lands by a lake or stream. Full-timing doesn't have to be expensive.

We also volunteered for national and state parks at times for a couple months at a time. Volunteering gives you purpose and it's a good feeling knowing you've helped out. It also gives you a campsite.

Remember..... full-timing is not supposed to be a perpetual vacation. It's a lifestyle. Take it easy.... and don't set a timeline.

Lastly, there's a full-timing section on this forum. You might want to go there to check out past discussions on this and other full-timing topics. Best of luck to you!

[wnytaxman]

When we have had clients ask us that same question we usually narrow it down to states with no income tax. The states most often being the best solution being Texas and Florida. For those that plant down permanent roots many also prefer Tennessee. The nickname for those that opt for Tennessee is halfbacks....they left NY, went to Florida and then came halfway back.

Nothing really changes for you on a federal level. More than likely you will be using the new standard deduction. Your big decisions and changes come down to the state level. Income taxes would be primary so look to those states with no income tax or very low income taxes. Next, be aware of personal property taxes. Those can be much more onerous than income taxes in some states. If you plan on spending any length of time in one state then sales taxes can be a major cost. Enjoy your search!

[barmcd]

Originally Posted by Jeff6146

Texas is very popular. Also great veteran benefits, probably the best in the US. And i was told that sales tax was deductible. I’m assuming only the first year.

2017 was the last year sales tax is deductible on your income tax.

[wnytaxman]

Originally Posted by barmcd

2017 was the last year sales tax is deductible on your income tax.

Just to clarify, sales tax, income taxes, real estate taxes, and personal property taxes are still deductible. They are, however, limited to no more than a total of $10,000. Mortgage interest on both a first and a second home is still deductible but the principal is now limited to $750,000 if the mortgage was not in place during 2017.

[CLIFFTALL]

Thank you for the clarification. Is that $10,000 part of the $24,000 standard deduction?