News:

SMF - Just Installed!

Main Menu

Can I deduct my RV loan interest from my taxes Survey

Started by kampingkoge, May 23, 2006, 02:07 PM

Previous topic - Next topic

kampingkoge

I found this on information on "Tims" website http://www.popupcamping.info/index.html and I was wondering how many folks deduct the interest on their RV loans.  I personally have a secured RV Loan from the credit union but I have not deducted any interest since I didn't think I qualified. I read the IRS publication 936 and the way I understood it was the camper needed to be purchased with some type of home equity or 2nd mortgage loan.  I fill out my own taxes, I also called the IRS (no help) and asked a friend of a friend who does Taxes on the side (not much help either).  


Can I deduct my RV loan interest from my taxes?
First of all, I am not a tax professional, I don't even play one on TV.  Take all advice you get over the internet with a grain of salt.

Now, if we look at IRS Publication 936 - Home Mortgage Interest Deduction you will find what qualifies.

It states:  "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."

As with many laws and regulations, there is no further definition of "sleeping, cooking, and toilet facilities". This is left up to you as to what you feel comfortable claiming, if audited what the IRS auditor believes and previous tax court rulings on this definition.

I do know that many folks with boats claim the second house deduction for boats with porta pottis.  The other key word is "secured".  Again, from the IRS Publication 936 - Home Mortgage Interest Deduction the definition of secured debt is: "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."  So, the pop up MUST be collateral for the loan and it must be at risk if you don't pay the loan.

Again, talk to your tax professional about this issue - don't just take my word for it!

OC Campers

When we first bought our popup we deducted the interest from our taxes (we had a straight forward RV loan).   From what I understand, as long as it has a full bathroom (shower, sink and toilet) it can be considered a "second home" and the interest on the loan can be deducted.  Our popup has been paid off for about 4 years now so I don't know if the tax law has changed since then.
 
Jacqui

zamboni

Too keep this simple:  Yes.  My mother is a tax professional with HR Block, and she is also an EA (Enrolled Agent -- licensed by the US Dept of Treasury to represent taxpayers before all IRS inquiries/court) -- http://www.naea.org/

Quote from: kampingkogeI personally have a secured RV Loan from the credit union but I have not deducted any interest since I didn't think I qualified. I read the IRS publication 936 and the way I understood it was the camper needed to be purchased with some type of home equity or 2nd mortgage loan.


There is your answer.  The courts have upheld that an RV is a qualified second, or vacation, home.  If you have a loan, and the loan is secured by the RV, then, your loan is therefore "secured by your second home".  Just like the bank will take your first home if you default on your mortgage, they will take your "second home" (RV) if you default on that loan :)

Here is the National Association of Enrolled Agent's web page about RV interest:
http://www.naea.org/MemberPortal/About/PressRoom/press_release_july_1_05.htm

Turbotax will also helpfully have you deduct your RV loan.

Tim5055

Quote from: OC CampersFrom what I understand, as long as it has a full bathroom (shower, sink and toilet) it can be considered a "second home"

Jacqui,

Many people "understand" this many different ways.  The only definition in the law is "sleeping, cooking, and toilet facilities".  The IRS rule says nothing about "shower, sink and toilet".  Whe in doubt, always go to the source and quote the law/rule.

As my web page says there is no further definition of "sleeping, cooking, and toilet facilities", so you have to look at rulings and what you feel comfortable deducting.

zamboni has covered the "secured" part very well.

Again, don't take tax advice from folks on the internet, visit your own tax professional.

kampingkoge

Quote from: zamboniToo keep this simple:  Yes.  My mother is a tax professional with HR Block, and she is also an EA (Enrolled Agent -- licensed by the US Dept of Treasury to represent taxpayers before all IRS inquiries/court) -- http://www.naea.org/

There is your answer.  The courts have upheld that an RV is a qualified second, or vacation, home.  If you have a loan, and the loan is secured by the RV, then, your loan is therefore "secured by your second home".  Just like the bank will take your first home if you default on your mortgage, they will take your "second home" (RV) if you default on that loan :)

Here is the National Association of Enrolled Agent's web page about RV interest:
http://www.naea.org/MemberPortal/About/PressRoom/press_release_july_1_05.htm

Turbotax will also helpfully have you deduct your RV loan.

Thanks for the feedback, I do use Turbo Tax and if I remember correctly I think Turbo Tax requested a 1098 Mortgage Interest Statement to be entered into the profile, since I did'nt have one I went no further.  The good thing is this is only my first year, so I can still claim many years of interest for my future tax returns.