IRS and the Interest Deduction

[msmith1199]

Anybody else having issues with the IRS on the mortgage interest deduction for the motorhome as a second home? My motorhome is financed through Wells Fargo Bank. For the entire life of the loan they have never sent me a 1098 for the Interest. I just get an end of year statement with the total interest paid, and I take the deduction. A couple of months ago I got a letter from the IRS with a bill and an explanation that the 1098's that were reported to them for mortgage interest do not match the amount I reported. They said to send in a written explanation if I didn't agree.

So I prepared the written explanation and attached a copy of my end of year statement and sent it all in. Well today I get the same letter saying based on my response I still owe them $1100. They say the documents I sent don't support the deduction.

Anybody else have this problem? Does your lender send you a 1098 for mortgage interest on the motorhome?

On Edit: I should have said form 1098 and not 1099 so I changed them.

[wnytaxman]

Banks can not send out a 1098 on an RV loan. The 1098 is only for real estate loans and an RV is considered to be personal property. Granted it is personal property that qualifies as a second home which allows the interest to be deducted.

You will avoid issues with the IRS by just reporting the interest on the proper line with the indication of the name of the lender and the fact that it is an RV loan. Do NOT put the interest on the home mortgage line. That line is cross referenced with the form 1098's that banks send out and they do NOT send out 1098's on RV's. Proper line means no notices from our friendly IRS. Wrong line means you'll be writing letters and making phone calls.

[Alan_Hepburn]

RE_Todd wrote:
Don't know if it was answered, but Wells Fargo has never sent me any tax documentation (1099 or ??) unless I called and asked for it.

Most banks will not send out a 1098. But if you look on your monthly statement you'll see an entry for "Interest Paid YTD" - your December statement will give you the total interest paid for the year. If the IRS ever questions the deduction all you need is a copy of that December statement showing the loan, and the YTD interest.

[RE_Todd]

Don't know if it was answered, but Wells Fargo has never sent me any tax documentation (1099 or ??) unless I called and asked for it.

[xctraveler]

We are financed with Bank of the West, third coach I have had with them.

Here is the text of the year end statement they send:
THE INTEREST PAID ON YOUR BANK OF THE WEST ACCOUNT IS INDICATED BELOW. WE
RECOMMEND THAT YOU CONSULT A TAX ADVISOR OR THE IRS TO DETERMINE THE
APPROPRIATE AMOUNT DEDUCTIBLE TOR TAX PURPOSES. PLEASE RETAIN THIS COPY FOR
YOUR RECORDS AS WE DO NOT MAII SECONDARY NOTICES OR 1098 FORMS FOR YEAR-END
INTEREST INFORMATION. IE YOU HAVE ANY QUESTIONS, PLEASE FEEL FREE TO CALL OUR
CUSTOMER SERVICE DEPARTMENT AT 800-827_7500.
: LOAN NUMBERxxxxxxxxxxxxxxx TOTAL FINANCExxxxxxxx BANK OF THE WEST COLLATERAL
; CHARGES PAID DESCRIPTION
2012 PHAETON 36QSH

I do use an accountant to prepare my return and this amount is on a separate line. Have never hear from IRS about this issue, yet. Now I have no mortgage as I have no house so MH is my primary residence.

[paulcardoza]

We are also with US Bank. They do not send out forms for RV loans. I have had to call them every year to get the interest amount paid. They always send me a confirming letter with the amount of interest, noting that the loan is an RV loan.

clinedinstjt wrote:
I had the same problem for 2012 tax year. My accountant sent a letter to IRS explaining it was used as a second home and I guess IRS was satisfied with the response. I use US Bank and they don't send out 1099's, just a year end statement.

[clinedinstjt]

I had the same problem for 2012 tax year. My accountant sent a letter to IRS explaining it was used as a second home and I guess IRS was satisfied with the response. I use US Bank and they don't send out 1099's, just a year end statement.

[msmith1199]

alandsusy wrote:
Just request a 1099INT from the bank or download it from the bank website for your account.

It's not a 1099 it's a 1098 (I learned that), the bank won't and can't issue those on an RV loan (learned that here too), so there is nothing to download on the website for your account. I didn't learn that here, I figured it out on my own.

[DavinD]

This post likely saved me some issues. I hadn't filed mine yet and I put mine under the 1098 section. I've now changed it. Thanks so much to all of you.

[alandsusy]

Just request a 1099INT from the bank or download it from the bank website for your account.

[down_home]

We also, now, are through Wells Fargo. Never had a problem until last year or the year before. Had to talk to Wells Fargo and get a letter from them. Done the return the same way for many years.

[Alan_Hepburn]

We received "the letter" a couple of years ago, for our 2010 return, questioning our interest deduction. I sent them a copy of the letter I got from my lender showing the interest paid, and that was all it took to clear it up.

I believe that typical mortgages provide a year-end statement - i forget the form number - but most RV loans may not provide an official IRS form. But if you've got a document from your lender showing what the loan is for, and how much interest you paid then you're good to go.

[msmith1199]

powellmj wrote:
msith1199 - I'm going through the same issues. I'm on my 3rd round of letters with them. But today, they mailed me a form 5564 - Notice of Deficiency Waiver to complete. Heading to my CPA with this one to see what the next steps are. Interesting to see that so many of us are being challenged on the deductions.

Read my solution. I was on the phone for 10 minutes, he took my word for it when I told him what the deduction was for, and the problem was fixed.

[powellmj]

msith1199 - I'm going through the same issues. I'm on my 3rd round of letters with them. But today, they mailed me a form 5564 - Notice of Deficiency Waiver to complete. Heading to my CPA with this one to see what the next steps are. Interesting to see that so many of us are being challenged on the deductions.

[dubdub07]

This was the first year I have ever been challenged. I would guess that there is a very coincidal reason for this.....