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Tax Deduction On Rv Loan


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#1 sonic2

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Posted 07 January 2011 - 08:11 PM

Important tax information for people that need deductions.

IRS Publication 936

http://www.irs.gov/p...blink1000229991

Home Mortgage Interest
This part explains what you can deduct as home mortgage interest. It includes discussions on points, mortgage insurance premiums, and how to report deductible interest on your tax return.

Generally, home mortgage interest is any interest you pay on a loan secured by your home (main home or a second home). The loan may be a mortgage to buy your home, a second mortgage, a line of credit, or a home equity loan.

You can deduct home mortgage interest if all the following conditions are met.
  • You file Form 1040 and itemize deductions on Schedule A (Form 1040).
  • The mortgage is a secured debt on a qualified home in which you have an ownership interest. “Secured debt” and “qualified home” are explained later.
Both you and the lender must intend that the loan be repaid.

Qualified Home
For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.

Secured Debt
You can deduct your home mortgage interest only if your mortgage is a secured debt. A secured debt is one in which you sign an instrument (such as a mortgage, deed of trust, or land contract) that:
  • Makes your ownership in a qualified home security for payment of the debt,
  • Provides, in case of default, that your home could satisfy the debt, and
  • Is recorded or is otherwise perfected under any state or local law that applies.

In other words, your mortgage is a secured debt if you put your home up as collateral to protect the interests of the lender. If you cannot pay the debt, your home can then serve as payment to the lender to satisfy (pay) the debt. In this publication, mortgage will refer to secured debt.

#2 KTMRacer

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Posted 07 January 2011 - 09:44 PM

A word of caution. Without the proper paperwork trail from the lender to the IRS, you may end up in a "uncomfortable" situation with the IRS. If you want to deduct interest on an RV loan make sure the loan is secured by the RV AND VERY IMPORTANTLY the lending institution recognizes the fact that it is a qualified home mortgage and agrees to submit a form 1098 to the Feds. That's the form the feds use to match up any $ you show as qualified interest deduction. If 1098 totals don't match what you show on your tax form it can trigger a nasty response from the IRS for taxes due! If you don't get 1098's make sure you have some way of showing it's an actual qualified loan and how much interest you paid if you get questioned.

I just used my equity line of credit for our trailer, lowest interest rate and best terms I could find.

From a thread on another board, looks like there are folks thinking they have a mortage deduction and ended up in trouble with the IRS because either the loan wasn't secured by the RV, and/or the lender didn't think it was and didn't file a form 1098 with the IRS.
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#3 Dub

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Posted 07 January 2011 - 10:25 PM

I claimed the interest on my loan last year without a 1098 and the year before as well. They don't send out a form for RV loans but they will send a letter saying I have a loan and this is how much interest I paid. I just have to call them up every January, my accountant says there shouldn't be any problems.
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#4 Jewellfamily

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Posted 07 January 2011 - 11:48 PM

We deduct ours as well, but I have to re-read the rules when we do our taxes. You have to stay so many "stays" per year in the RV or you cant deduct it. Its not many though (I'm thinking 4, but would have to look it up again). Keep your campground receipts if you use campgrounds as that is one way to show you were out using your "vacation home".
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#5 sonic2

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Posted 08 January 2011 - 12:47 AM

We deduct ours as well, but I have to re-read the rules when we do our taxes. You have to stay so many "stays" per year in the RV or you cant deduct it. Its not many though (I'm thinking 4, but would have to look it up again). Keep your campground receipts if you use campgrounds as that is one way to show you were out using your "vacation home".

The 14 day rule you are referring about is not correct. It only applies if you RENT out your second home (RV) part-time. I keep the receipts to deduct the sales tax. I have added the last part of Publication 936 which will answer your question; I underlined the section for NON-RENTAL and put in BOLD the section you are referring about.

Qualified Home
For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.

The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. Otherwise, it is considered personal interest and is not deductible.

  • Main home. You can have only one main home at any one time. This is the home where you ordinarily live most of the time.
  • Second home. A second home is a home that you choose to treat as your second home.

Second home not rented out. If you have a second home that you do not hold out for rent or resale to others at any time during the year, you can treat it as a qualified home. You do not have to use the home during the year.

Second home rented out. If you have a second home and rent it out part of the year, you also must use it as a home during the year for it to be a qualified home. You must use this home more than 14 days or more than 10% of the number of days during the year that the home is rented at a fair rental, whichever is longer. If you do not use the home long enough, it is considered rental property and not a second home. For information on residential rental property, see Publication 527.

#6 mmblantz

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Posted 08 January 2011 - 08:15 AM

The interest on your RV is deductable just like your home interest is. I did it for years while I was making payments on the Outback and checked it out with "my people" at H&R Block as well as two other accountants just to be safe. Completely legal. ---Mike
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#7 outbackmac

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Posted 08 January 2011 - 10:31 AM

Just like a boat if you can eat ,sleep or take a dump you are good to go. Just what my cpa told me
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#8 thefulminator

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Posted 08 January 2011 - 10:56 AM

Just like a boat if you can eat ,sleep or take a dump you are good to go. Just what my cpa told me


X2,

I have a friend who is a CPA. Basically the same thing he said. I was able to deduct the sales tax on top of the interest as well.
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#9 Jewellfamily

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Posted 08 January 2011 - 01:20 PM

We deduct ours as well, but I have to re-read the rules when we do our taxes. You have to stay so many "stays" per year in the RV or you cant deduct it. Its not many though (I'm thinking 4, but would have to look it up again). Keep your campground receipts if you use campgrounds as that is one way to show you were out using your "vacation home".

The 14 day rule you are referring about is not correct. It only applies if you RENT out your second home (RV) part-time. I keep the receipts to deduct the sales tax. I have added the last part of Publication 936 which will answer your question; I underlined the section for NON-RENTAL and put in BOLD the section you are referring about.

Qualified Home
For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.

The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. Otherwise, it is considered personal interest and is not deductible.

  • Main home. You can have only one main home at any one time. This is the home where you ordinarily live most of the time.
  • Second home. A second home is a home that you choose to treat as your second home.

Second home not rented out. If you have a second home that you do not hold out for rent or resale to others at any time during the year, you can treat it as a qualified home. You do not have to use the home during the year.

Second home rented out. If you have a second home and rent it out part of the year, you also must use it as a home during the year for it to be a qualified home. You must use this home more than 14 days or more than 10% of the number of days during the year that the home is rented at a fair rental, whichever is longer. If you do not use the home long enough, it is considered rental property and not a second home. For information on residential rental property, see Publication 527.

Thats good to know. I thought there was a rule for the so many stays, but dont see it in the document. Thanks for the info.
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#10 ember

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Posted 08 January 2011 - 04:00 PM

I don't remember the particulars of it, but since we use it at trade shows, on the jobsite :construction: , and or to camp near a tradeshow we are also allowed to claim a %-age of it's cost as a business expense.
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#11 Nathan

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Posted 08 January 2011 - 06:42 PM

Yes, many rv loans do not give you the proper paperwork. It doesn't mean you can't deduct it though. Just get a year end statement for interest and file it with all your tax papers. That way if an IRS agent would like a clearer definition, you can always provide one (including any photos of the unit showing that it has sleeping areas, a kitchen and a bathroom or whatever they want to see). The fact is that it is deductible, but sometimes the paper trail is lacking.... The worst that will get you is an audit, and if you have the documentation, you should do fine. Oh, do make sure the entire lien is against the trailer though.... a personal line of credit used to buy a trailer would be a more difficult argument. :whistling:
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#12 sunnybrook29

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Posted 09 January 2011 - 04:27 PM

Careful when you are using the depreciation in a business . When you sell or trade the R.V. any money realized above the depreciated value will count as income in that year .

#13 matty1

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Posted 10 January 2011 - 01:30 PM

My bank does not automatically send a 1098 for my RV loan, so I just call and request one and they send it no problem...just for my records
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#14 LarryB

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Posted 31 March 2012 - 04:52 PM

My H & R Block office said there was an addition requirement that the RV be on some kind of foundation. Never heard that before. Can't find any justification for it. Anyone else ?

#15 CamperAndy

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Posted 31 March 2012 - 05:03 PM

My H & R Block office said there was an addition requirement that the RV be on some kind of foundation. Never heard that before. Can't find any justification for it. Anyone else ?

Never heard of that one. I only heard of the requirement for a bathroom and kitchen.
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