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Old 03-07-2011, 08:40 AM   #1
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AS Tax Deduction as Second Home

HI All,
As April gets closer and closer I am working on my taxes. yah.

I have read that you can deduct the interest you pay on your AS loan as a second home. Found IRS Pub. 936 and it states that:

"Qualified Home
. . . A home includes a . . . mobile home, house trailer, boat or similar property that has sleeping, cooking, and toilet facilities."

And as long as the loan is secured by the AS it can be counted as a second home.

Just want to see who has done this write off in the past and not had any problems with the IRS. Don't want to put a stick in the hornets nest.

Thanks.
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Old 03-07-2011, 09:02 AM   #2
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You are correct -- this is the way it works. Galley + bathroom are the keys I always understood. Looks like your reading added the probably obvious sleeping area. Itemize on Schedule A. I'd have to dig to determine if I used line 10 or 11 -- all depends on having a Form 1098 in your mitts. I had no problem with this when I financed for a period when purchasing my '06. Never brought a question from the IRS at all.

Prolly shouldn't double-deduct if using a home equity loan of course. Though it wouldn't be savvy to buy a 'Stream that way. Want to rule out somebody thinking "I read it here!" and jumping over the cliff.
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Old 03-07-2011, 10:15 AM   #3
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Thanks Canoe for confirming what I thought. I did not use a home equity loan and your right that would not be "savvy streamn'"

Thanks.
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Old 03-07-2011, 10:15 AM   #4
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Yes, you can deduct the interest. I did so for several years before paying the AS off.
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Old 03-07-2011, 10:19 AM   #5
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Yep - did it with our SOB motorhome when we had it.
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Old 03-07-2011, 01:29 PM   #6
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All true, I think you must "live" in it 2 weeks a year also. Not an issue!
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Old 03-07-2011, 03:00 PM   #7
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I agree with others. We've used this deduction for years with no problem.
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Old 03-07-2011, 03:07 PM   #8
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I've taken the deduction with no problems from the IRS
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Old 03-07-2011, 03:48 PM   #9
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Quote:
Originally Posted by dznf0g View Post
All true, I think you must "live" in it 2 weeks a year also. Not an issue!
So, can I deduct the cost of and all the expenses of renovating my 1960 AS if I live in it 2 weeks/year?
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Old 03-07-2011, 05:33 PM   #10
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If you purchase an AS and obtain a loan to make that purchase then the interest you pay on the loan is the only deductible item. It is included on Schedule A (itmeized deductions) just like the mortgage interest you pay on your first or other home. You cannot deduct any expenses for renovatin or improvements to your AS.
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Old 03-07-2011, 06:38 PM   #11
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Wow, I never knew this. Sounds like something to investigate. Thanks for the tip.
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Old 03-07-2011, 07:46 PM   #12
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I have deducted my interest for the past 2 years now. Not a problem. My CPA suggested it.
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Old 03-07-2011, 08:16 PM   #13
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I wonder how many Airstreamers with loans don't know about this. When we purchased last year our dealer said something about off-hand, and I really did not take him seriously.

We are pretty conservative when it comes to write-offs for fear of the tax-man, but definitely taking advantage of it this year.
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Old 03-07-2011, 08:26 PM   #14
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negative. i did this and the irs came back and wanted the back taxes owed. you can only deduct it if you tie the loan to your home mortgage according to the irs and my accountant. i had a simple interest loan that was not deductable. i have a 33' airstream land yacht motorhome and this equaled almost $6000 in taxes they wanted over a 3 year period. there was no way i would ever tie the loan to my home, so i paid the money. think twice about it. the irs has long reach and isn't afraid to come back for more. i was not audited. they just sent the letter saying the bank never filed the mortgage interst deduction and they wanted thier money NOW! it took them a few years to catch up, but they did.
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Old 03-07-2011, 08:55 PM   #15
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Just got off the phone with the IRS and they said it is deductible as a second home. Just make sure you get your 1098 from the financial institution if it is over $600.

normandgrace,
If your interest was over the $600 your bank is required to submit a 1098 to you and supply it to the IRS.
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Old 03-07-2011, 09:04 PM   #16
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Sounds like it's time for a new accountant. I did this with our boat that we had for 4 years. All I did was ask the lender to send me an annual interest statement on the which stated what the loan was for. Got audited about 3 yrs in and was asked to provide dates we stayed on the boat. Showed them my day planner and never heard another word about it.

Galley area and toilet are key. Our boat had a slide out kitchen area and a porta potty in an area specially fitted for it. Been in a couple of other scrapes with the IRS regarding tax filings my employer made. turns out that my employer was in the right, but the language was ambiguous and someone thought there was money to be had.

IRS likes to bully people like any collections agent. keep your records and your head. the organized shall inherit the earth.

Alternatively you could pay cash and avoid all hassles.
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Old 03-07-2011, 09:14 PM   #17
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Quote:
Originally Posted by normandgrace View Post
negative. i did this and the irs came back and wanted the back taxes owed. you can only deduct it if you tie the loan to your home mortgage according to the irs and my accountant. i had a simple interest loan that was not deductable. i have a 33' airstream land yacht motorhome and this equaled almost $6000 in taxes they wanted over a 3 year period. there was no way i would ever tie the loan to my home, so i paid the money. think twice about it. the irs has long reach and isn't afraid to come back for more. i was not audited. they just sent the letter saying the bank never filed the mortgage interst deduction and they wanted thier money NOW! it took them a few years to catch up, but they did.
It sounds like the problem you had is that your loan wasn't secured by the Land Yacht... maybe it was a signature loan? The loan doesn't have to be "tied to" your PRIMARY home, it must be on your second home, which is the Land Yacht. The IRS puts it this way:

"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."

You can view the IRS publication here.
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Old 03-07-2011, 09:14 PM   #18
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Yes! We deducted the interest on the loan for as long as we were paying for it...just like you'd deduct interest on a home loan. We did this is our first moho and then the AS... We did got an interest paid statement from the lender and our tax person included it in our deductions... It's legit.
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Old 03-07-2011, 09:48 PM   #19
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Quote:
It sounds like the problem you had is that your loan wasn't secured by the Land Yacht... maybe it was a signature loan? The loan doesn't have to be "tied to" your PRIMARY home, it must be on your second home, which is the Land Yacht. The IRS puts it this way:
I like the way DKB says it. This is the reason we had the annual interest statement from the lender wrapped up in the annual tax documents.

That 16' bambi is way more roomy than our 23' sailboat. You can at least stand up in it!
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Old 03-08-2011, 08:30 AM   #20
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I misspoke earlier in regards to getting a 1098 from your lender. Since a 1098 is only issued on a mortgage you have to ask for a letter stating your interest paid from your lender.

The interest deduction is put on line 11 of the schedule A.

This is from bankrate - Deducting RV mortgage interest

"Interest paid on boat and RV loans is not required to be reported by the lender on Form 1098. Nevertheless, you can claim the deduction for interest paid on these loans so long as you otherwise meet the deduction standards."
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