Tax Time

The friendliest place on the web for anyone with an RV or an interest in RVing!
If you have answers, please help by responding to the unanswered posts.
Status
Not open for further replies.

wnytaxman

Member
Joined
Dec 27, 2012
Posts
11
As we approach the tax filing season I'd just like to remind everyone that there are deductions available to the RVer.  The first is that if you bought your RV this year you may be able to deduct the sales tax you paid on the RV.  You get the sales tax deduction if your sales tax paid on your RV plus the amount of sales tax from the table for your state exceeds your state income tax paid.  If you are in a personal property tax state and you pay personal property tax on your unit, that is deductible.

If you have a loan on your RV and your RV has kitchen and bathroom capabilities, that interest is deductible on Schedule A as "Other Interest."  Do not deduct it as mortgage interest as this will probably get you a greetings letter from our friendly IRS.  I usually list it as RV Interest and the name of the bank or finance company on the same line. 

If you don't itemize your deductions, then this is a moot point because you have to itemize to take these deductions.

Ed
 
Thank you Ed for this information, we bought a new 5th wheel in 2012 and was told we could claim interest but was not sure just how to file it this answered our question.
 
wnytaxman said:
If you have a loan on your RV and your RV has kitchen and bathroom capabilities, that interest is deductible on Schedule A as "Other Interest."  Do not deduct it as mortgage interest as this will probably get you a greetings letter from our friendly IRS.  I usually list it as RV Interest and the name of the bank or finance company on the same line. 

Ed

If you have a home and/or an RV and both qualify under IRS requirements (mortgage amount, usage, livability, etc.) you can deduct the interest as mortgage interest. Some RV lenders even issue a Form 1098 and/or EIN to enter on the return. I've never heard of anyone having any issue with such treatment.
 
Back when we itemized deductions, we listed the RV interest under mortgage interest, right under the stick house mortgage interest. RV interest is the same as vacation home mortgage interest and is treated the same, i.e., listed under mortgage interest on Schedule A. Never had a problem with it and that's how it was listed the year we were audited (for something unrelated to RV interest). The auditor had no problem with the RV interest deduction or its placement.

Wendy
 
The IRS has started to compare 1098's to the Schedule A mortgage interest line.  If you have more interest on that line than what was reported on the 1098, then the return can draw a notice.  By putting the interest on the "Other Interest" line you remove some of the potential for a notice.  Not everyone gets a notice by combining the interest on the RV with the home mortgage interest, but do you really want to draw attention to your return?  Most of us don't!
 
Makes sense and I fully agree that we want to stay below the IRS radar.  However, I don't have any other home mortgage interest, so there is no 1098 to compare against. I've often wondered if that alone would kick my return out for examination, but it hasn't so far.
 
We don't combine the amounts for the stick house and the motorhome interest. We list them as separate amounts on the mortgage interest line. Having been audited twice, we certainly don't want to wave any red flags at the IRS.

Wendy
 
Generally you won't have an issue with rv interest even though it isn't on a 1098.  There are certain keys that the IRS will look at for mortgage interest.  One of those keys is whether or not your mortgage interest is over $60,000.  You are capped at $1 million of mortgage principal so the IRS figures that if you are claiming more than $60,000 you have overstated your mortgage interest.  You do have limits on home equity loans and on second home mortgage interest also, but most of us "normal" folks won't have those issues.

Ed
 
We used to have a boat loan and used it as second home interest.  The bank never sent a 1098 form, just a letter to us stating the amount.  One year the IRS questioned the entry.  I send a letter explaining the amount and a copy of their letter and never heard from them again.
 
Yes, and this is one the things that our illustrious  folks in Washington want to eliminate.
 
hapecamper said:
Yes, and this is one the things that our illustrious  folks in Washington want to eliminate.

You are correct that this deduction for second home interest is one of the "loopholes" they are thinking of knocking out of the tax code. 

Ed
 
Well, if you're rich enough to have two homes then you should be made to provide more money for those who choose to not work.

Did I slice that thin enough?

Ken
 
Status
Not open for further replies.
Back
Top Bottom