vehicle depreciation tax deductions

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Peregrine

Peregrine

Well-known member
Joined
Mar 10, 2010
Posts
81
Location
Asheboro, NC
Hi all-heard something on the radio this morning concerning a federal tax deduction on the depreciation for vehicles.Since I live full time in my motor home,and it sure is depreciating,is there a federal tax deduction somewhere?
I have always heard that a person could use a loan interest deduction on a motor home but in my case I owe nothing on my unit.
as always thanks for any info.
Jeff
 
Unless there's something new, you can only deduct depreciation if it's used in a business.
 
Peregrine said:
I have always heard that a person could use a loan interest deduction on a motor home but in my case I owe nothing on my unit.
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Since you don't have a loan on your RV, you have no interest expense to deduct. If you were paying interest on a loan secured by the RV, you could deduct the expense paid to the extent permitted by IRS regulations.
 
I recommend talking to a tax accountant. (I'm surprised there hasn't been one to chime in yet). If you operate a business while traveling full time and are using the RV as a home office, you should be able to depreciate a percentage of the total value of the RV for tax purposes. The percentage would be whatever percentage is actually allocable to use as a home office (probably relatively small).  You really would need an accountant to properly calculate.

Note also that "depreciation" for tax purposes is different than the actual decrease in value. The amount that you can deduct is calculated based on a schedule over the useful life of the vehicle.
 
At least 2 accountants did respond, including one tax accountant. If you live in the RV more than 14 days a year, forget depreciation, it's a dwelling. As for deducting part of the RV for business expense, there must be an area dedicated solely to business and you'd have a hard time convincing IRS that you had that in an RV as small as they are. As Bernie said, you can deduct loan interest on an RV if it meets certain criteria and if you itemize deductions. If you really think you have a legitimate deduction but are unsure how to proceed, by all means, contact a tax accountant.

Wendy
 
As for deducting part of the RV for business expense, there must be an area dedicated solely to business and you'd have a hard time convincing IRS that you had that in an RV as small as they are.
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DW has an office in our stick and brick winter home that we (legally and legitimately) deduct expenses and depreciation for during our half year there. We had an audit a few years ago and the primary focus was the home office. We had to furnish exact measurements and photos to prove that the room is set up as an office and likely not used as a spare bedroom, etc. During the interview there was some discussion about an investigator actually doing an on site inspection, but they later cancelled and allowed all the deductions without further questions.

I could not imagine trying to convince the IRS that any portion of the motorhome was dedicated to business use exclusively, unless a portion were walled off and obviously of no use other than the business. We met a couple last summer who traveled the country and did some kind of commercial pump repair. Most of their travel trailer was set up with a workshop and parts inventories. They lived in a small area in the front end. Their arrangement would probably qualify.
 
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