I bought our new 25' Safari FB SE last year and it occurs to me that it may be timely to bring up a previous topic. We did our taxes today and our very savvy accountant agreed in full.
Deductible mortgage interest for a second home applies exactly as for your first home. A kitchen and bathroom are necessary to qualify if I recall, thus interest on any RV loan for a qualifying trailer or sailboat can save you some money (sadly, SOBs would qualify...). You don't even have to expose yourself to the problems of taking a home equity loan on your first residence -- though at least home equity loans would generate a 1099 form. Thus she explained our interest deduction on a separate line in the federal form so it wouldn't draw a red flag.
I'm not an accountant and don't play one on TV -- but I've read it here before and know that it works! No reason not to jump into the deep end now .....
for an rv, boat or tree house to qualifiy as a second residence,
it must have a galley, sleeping area and head.....
and one must be itemizing deductions......and own a first residence.
less than 1/2....
closer to 1/3 of the home owners who qualify for 1st mortage interest deductions...
actually itemize.....
that's right, most home owners take the standard deduction....
it's interesting and curious why that is....
cheers
2air'
2air,
Perhaps they do not have enough deductions to exceed the standard deduction.
Bill
__________________
Bill Kerfoot, WBCCI/VAC/CAC/El Camino Real Unit #5223
Just my personal opinion
1973 Dodge W200 PowerWagon, 1977 Lincoln Continental
1979 23' Safari, and 1954 29' Double Door Liner Orange, CA
and one must be itemizing deductions......and own a first residence.
While you do have to itemize deductions in order to claim the interest deduction on your RV, you do not have to own a first residence. Even if you are a fulltime RVer, and your RV is your only home, you can take the mortgage deduction. Now, whether without a "sticks & bricks" house, or other large deductions, your deductions will be larger than the standard deduction, is another question entirely.
2air,Perhaps they do not have enough deductions to exceed the standard deduction.
Bill
you are correct bill that certainly would be the case for some.....
but the average home mortgage is somewhere over 130-150k now...
so depending on interest rates.....most of the folks not itemizing have 6-10k in home interest alone....and another 1-4k in property taxes....
so they easily qualify and would benefit.
it isn't clear to my why more people don't use this legal tax reduction.
you are correct elh3946 an rv or boat can be a primary residence, with full tax benefits.....
but the topic was started as a secondary home/residence theme....
a big harley or conversion van for example doesn't qualify....
while an airstream westfalia does....
cheers
2air'
__________________ all of the true things that i am about to tell you are shameless lies. l.b.johnson
we are here on earth to fart around. don't let anybody tell you any different. k.v.
Going back to the original post, the form showing mortgage interest paid is a 1098, not a 1099. (A 1099-INT shows interest received.)
As to 2air's comment about the surprising number of people with ownership that don't itemize, for some it could be that their loan is old and is now largely principal, or they have a "Prop 13" property tax deal and their taxes are now low. The Standard Deduction for a couple under 65 is $10,000, and $12,000 if over 65. (If both are also blind, the Standard Deduction is $14,000, although hopefully they retired from RV'ing.) Throw this in with personal exemptions, maybe there are no taxes at all, so why bother itemizing.
__________________
Cam 2005 25' Safari SS 2005 Dodge Ram 2500 Turbodiesel WBCCI #3580 - Region 12 NorCal AIR #8752
Roseville, CA
I currently write off nearly every cent of interest on the 2004 Safari as of this posting. Helped get me a refund from both the feds and the local yokels.
I may bring it to work on the nights when I know I'll have to stay till the wee hours and write off even more of it......taking depreciation too.... of course your mileage may vary based on your situation, but I've had 3 folks look at it and say, heck yeah if I use part of it for work, I can write that part off too. So for all you folks working late, late hours......
Now if I could only get SSNs for both dogs....
__________________
Computers manufactured by companies such as IBM, Compaq and millions of others are by far the most popular with about 70 million machines in use worldwide. Macintosh fans note that cockroaches are far more numerous than humans and that numbers alone do not denote a higher life form. -NY Times 1991
and here's a bad tax joke.....
??when canadians file taxes in the u.s.
which form do they use?
canadians use the 1040a'......
say it out loud with inflection on a (eh).....
did say it was a bad joke....
your examples of old mortgages and prop 13 issues are exactly why some don't benefit.
sorry, i should have been clearer.....
the majority of filers who qualify, have mortgage interest and would benefit from itemizing........
do not.
no doubt you've read the recent tax reform proposals for simplifying the fed tax code...and eliminating the home mortgage interest deduction....
this is gonna be a big issue over the next 2 years....and one of the myths often expressed, is that the fed government has promoted home ownership in the usa with the tax code....in the form of this home interest deduction.
cheers
2air'
__________________ all of the true things that i am about to tell you are shameless lies. l.b.johnson
we are here on earth to fart around. don't let anybody tell you any different. k.v.
I wonder how long we will be allowed to get off topic??
2air, I had not heard a majority that qualify do not itemize, very strange.
I don't think the real estate industry--agents, lenders, builders, etc--will let the govt eliminate the mortgage interest deduction, too strong a lobby group, and could cause real estate values to drop. I do think allowing the deduction encourages home ownership (for those that use the deduction), but it is a little unfair to renters. I guess the answer to that is we were all renters once, but unfortunately some people are never able to own their own home.
__________________
Cam 2005 25' Safari SS 2005 Dodge Ram 2500 Turbodiesel WBCCI #3580 - Region 12 NorCal AIR #8752
Roseville, CA
We also deducted the intrest on our Airstream loan.
It was considered a 2nd home,
Our Tax gut also said that in order to deduct it you must live in it for at least 2 weeks a year. This was not a problem since we go camping every chance we get
yep, 2 wk rule, hopefully we all use'em that much....even if just in the back yard
cam...
i don't think the tax issue is off topic.....
since it relates directly to how we finance our airstreams.....and unit pricing.
home ownership is at an all time high in the usa in absolute numbers and as a percentage of the population....on the risky side, 'interest only' loans are a fast growing segment....
i too used to think the tax code promoted home ownership.....
however in other nations with similar economies....
but no tax mortgage tax benefit..
home ownership rates are similar to the usa
the 'interest deduction benefit' is most prized by the top 3% on the income side....
and with 1st/2nd home loans well above 7 figures....
you're correct the realtors, builders and so on will fight this change and house prices could drop some...10% or so....
so the prediction is that the deduction will be phased out...starting with the highest income filers....
having the interest deduction benefit has always been nice for rvs, and takes the bite out of a 10 year or longer loan...
but i'd still own an airstream without the deduction...
cheers
2air'
__________________ all of the true things that i am about to tell you are shameless lies. l.b.johnson
we are here on earth to fart around. don't let anybody tell you any different. k.v.
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