Deducting interest

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RogerW

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Is it true that you can deduct the interest paid on a camper or is this just an urban legend. I couldn't find it on the IRS website. I am thinking of upgrading and that is a good sales point for my wife...lol

Thanks, Roger
 

BruceinFL

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RogerW said:
Is it true that you can deduct the interest paid on a camper or is this just an urban legend. I couldn't find it on the IRS website. I am thinking of upgrading and that is a good sales point for my wife...lol

Thanks, Roger

Yes, I did. You can deduct the interest on a second/vacation home (RV qualifies) as long as the RV is the collateral.  Just like a mortgage. But to be sure, since I am not a tax expert, check with one or with the IRS.
 

Wendy

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Yes, you can deduct the interest on an RV loan as a 'second home' mortgage expense. However, the RV in question must have cooking, sleeping and toilet facilities to qualify.
 

GaryB

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I had a tough time finding the IRS publication also that discusses that.  But I did find two links (see below) with information - I'm sure there's many more out there.  Wendy and Bruce are right on with their advice.

Gary

http://www.naea.org/MemberPortal/About/PressRoom/press_release_july_1_05.htm
http://www.njsea.org/June1_press.htm
 

Carl L

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RogerW said:
Is it true that you can deduct the interest paid on a camper or is this just an urban legend. I couldn't find it on the IRS website. I am thinking of upgrading and that is a good sales point for my wife...lol

Thanks, Roger

An RV can be claimed as a second, vacation, home.  The loan must be secured by a lien on the RV so don't do a unsecured loan.  I claimed my trailer for 10 years and am still at liberty. 

Remember free tax advice from amateurs is like free medical advice from amateurs -- worth every dollar you spend on it.  Ask a real accountant or an enrolled agent to be really sure.
 

Shayne

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Better yet d borrow against your house and then decduct it with a clear title to the RV  then there is no mistaking and no problem.
 

Wendy

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Carl Lundquist said:
Remember free tax advice from amateurs is like free medical advice from amateurs -- worth every dollar you spend on it.? Ask a real accountant or an enrolled agent to be really sure.

Never been overly fond of taxation but a BSBA in Accounting and an MBA in Accounting from the Univ of Colorado makes me a real accountant.

You CAN deduct interest on an RV loan if it's a secured loan, if you don't rent it out, if it meets the sleeping/cooking/bathroom tests. IRS Pub 936 states that a qualified home "...includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities." Pub 936 also states that "A second home is a home that you choose to treat as your second home. "

Of course, all this presupposes that you have enough deductions to bother with itemizing.


 

John From Detroit

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Carl Lundquist said:
Finally, someone that knows what she is talking about! 

How did that happen here?  ;D

Well Carl... As you know... Accidents happen.

And to Wendy.  Thanks, it's nice to hear from a genuine professional in the field
 

Wendy

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John In Detroit said:
Well Carl... As you know... Accidents happen.

And to Wendy.? Thanks, it's nice to hear from a genuine professional in the field

You're welcome. Sorry if I confused things by knowing what I was talking about. Shouldn't happen again :)

Just an extra note on the subject, when the IRS says "includes" and "similar property," that leaves a lot of leeway....just ask a lawyer to define "similar."

 

RogerW

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You guys (and ladies of course) are great. Thank you very much for your help and I am sure I will be asking for more help in the future.

Roger
 

GaryB

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I looked thru the IRS pub but couldn't find the answer to the following:

I was told by a salesman (yes, I know they'll tell me anything :) that, with a 5th wheel, I can deduct interest not only on the 5th wheel, but also on the tow vehicle.  Is that true?

Thanks
Gary
 

Gary RV_Wizard

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I was told by a salesman (yes, I know they'll tell me anything Smiley that, with a 5th wheel, I can deduct interest not only on the 5th wheel, but also on the tow vehicle.  Is that true?

Some people have done that and got away with it.  It's arguably OK if you are fulltiming because you may consider the truck to be a necessary part of the "home". The weakness in that argument is that the truck is also your personal vehicle and as such is definitely not deductible.  Only if you have a separate personal vehicle is your case very strong.  If you are not fulltiming, it is all but impossible to argue that the truck is anything other than a personal vehicle that is occasionally used in conjunction with the trailer.  Consult a tax professional on your particular situation before attempting a deduction.
 

Carl L

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I was told by a salesman (yes, I know they'll tell me anything  that, with a 5th wheel, I can deduct interest not only on the 5th wheel, but also on the tow vehicle.  Is that true?

A salesman told you that and you have to ask if it is true!

Hell no, it is not true.  Why?  For the same reason that  a race track tout's tip is not true.  It is to his interest to have you believe him.  He is selling you something on commission.

But shoot don't believe me either -- ask a tax lawyer or a good tax accountant for a real answer.
 

GaryB

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I knew I was living dangerously by adding the word "saleman" to my last question  :eek:  I carefully considered to not include it, but then decided to ask and then duck. 

Thanks RVRoamer for the type of response that is actually useful.
 

Carl L

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GaryB said:
I knew I was living dangerously by adding the word "saleman" to my last question? :eek:? I carefully considered to not include it, but then decided to ask and then duck.?

Thanks RVRoamer for the type of response that is actually useful.

Fair enough.  The grenade was not lauched at you, it was launched at that mendacious salesman out there.    Any rate you have a useful answer from the Old Roamer.  The deduction is pretty clear for interest on loans that constitute liens on things you live in -- no more than two tho, a principal and a secondary residence.  A truck is really iffy and is worth getting decent advice. 
 

Wendy

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Sorry, interest on tow vehicle is NOT deductible unless you have some strong reason to consider it a business expense. IRS allows deduction of interest on a primary or vacation home which a tow vehicle is definitely not. You need kitchen, bathroom and sleeping facilities (all 3) to qualify for the interest deduction......soooooo, unless your tow vehicle has a stove, toilet and bed, forget it.
 

Gary RV_Wizard

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IRS allows deduction of interest on a primary or vacation home which a tow vehicle is definitely not.

The argument  is that the tow vehicle is part of the "home".  [Don't shoot me either - I'm just reporting what the believers in this deduction say.]

I know one person who has deducted the truck interest for many years and never been challenged. Of course, it does not show on the tax form as a separate item - it's just lumped into the home mortgage expense line.  I do not believe it would hold up in an audit, but most of us will never be audited if our deductions numbers fall within typical ranges for our level of income.

Maybe it would work if you could arrange to have one mortgage loan to cover both the trailer and the truck, but lendors generaly won't do that. Separate entities that can be bought and sold separately get separate loans.
 

scottydl

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Is it actually *worth* taking out a loan to pay for an RV, just to deduct the interest?  :-\  I've heard people say that even if you *can* pay off your house mortgage, you should keep a small amount just for the tax incentive.  This doesn't make sense to me, as common sense would say it's always better/cheaper to pay cash and own something outright.  ???
 
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