Tax Question for full timers

[Fleetwood_Coupl]

Have always heard MH's could be written off as a second home, but what if you are full timer and have no brick and mortar home? Is there any advantages? This is are first filling since owning.

[PawPaw_n_Gram]

Mississippi wrote:
everyone needs to be aware of a recent Tax Court ruling which disallowed business deductions for expenses associated with the use of a motorhome.

I've been told more than once by IRS agents and tax accountants - the fastest way to get an audit is to claim 'home office' expenses more than a few hundred dollars.

I've met some full-time RV folks who claim part of the value of the RV as a business deduction as a home office.

I realize that some folks might be able to get those type expenses allowed - but my personal preference is to maintain a low profile.

Claim my interest deduction, and nothing more.

------------------

One note on interest deductions for the RV as a second home. There was a fellow on this forum last year for whom the IRS would not allow his deduction. Turned out he owned some undeveloped property in addition to his main residence.

The bank holding the note on that property issued a 1099 for interest, even though the property had no residence or structures upon the land.

It took some phone calls to get straight - but if you own two pieces of land, one with your primary residence - be aware the IRS might not automatically allow the RV as a second home deduction.

[Mississippi]

Effy and Dubdub07, everyone needs to be aware of a recent Tax Court ruling which disallowed business deductions for expenses associated with the use of a motorhome. I have not studied the case in detail, but its implications were at first glance a cause of concern for those of us who have claimed business expenses for costs associated with the use of a motorhome as a business expense. As to the original question, interest on a qualifying motorhome are deductible as personal residence interest and the property taxes are also deductible on Schedule A as itemized deductions.

[Effy]

dubdub07 wrote:

Effy wrote:
No one is "writing off a MH" as a second home. You might be able to claim the interest on the loan but no one is writing off the principal. Even if it's a business you still only get depreciation and maintenance. The reason you can claim the interest is that it's considered a second home if it has a bathroom and bedroom. But if you only have one home and the MH is it, then you don't have a second home. The MH is your primary.

This is only partially true. Do not take Effy's advice to heart, there is more to things than meets the eye. Maintenance may or may not be used, depending on the manner in which it is taken for a deduction. If you do take maintenance, you have to figure which percentage of the coach is used for the business and then take that percentage and use it for all expenses. Gas, maintenance, costs, depreciation. If you depreciate the coach, what type of depreciation are you using? Also, if you sell the coach, you are supposed to disclose that it has been depreciated. You also have to decide how you will do your taxes. Do you flow the business taxes through your income or have it separate? What is your tax year? What is the nature of the business. Bottom line is you can take whatever you want but will need to prove yourself in the event of an audit. Schedule C's are audited at a 3-1 rate over individuals.

As far as the "write off", I believe that is just a term that we all use for taking the interest on our taxes. The taxes paid and interest are all used to reduce tax liability and are usually very lucrative for a second home. I would recommend having at least a piece of property that you call "home" and use the coach as a second. As a primary residence you probably wont see a deduction in your liability.

If what I say seems a lot, talk to an accountant. They will confirm what I say.

I know how it works Dub, I used to own an RV rental business. I was merely generalizing comparisons on what you can claim as a consumer vs a business. Op didn't ask about a business. They asked about writing off a MH as a second home.

[dubdub07]

Effy wrote:
No one is "writing off a MH" as a second home. You might be able to claim the interest on the loan but no one is writing off the principal. Even if it's a business you still only get depreciation and maintenance. The reason you can claim the interest is that it's considered a second home if it has a bathroom and bedroom. But if you only have one home and the MH is it, then you don't have a second home. The MH is your primary.

This is only partially true. Do not take Effy's advice to heart, there is more to things than meets the eye. Maintenance may or may not be used, depending on the manner in which it is taken for a deduction. If you do take maintenance, you have to figure which percentage of the coach is used for the business and then take that percentage and use it for all expenses. Gas, maintenance, costs, depreciation. If you depreciate the coach, what type of depreciation are you using? Also, if you sell the coach, you are supposed to disclose that it has been depreciated. You also have to decide how you will do your taxes. Do you flow the business taxes through your income or have it separate? What is your tax year? What is the nature of the business. Bottom line is you can take whatever you want but will need to prove yourself in the event of an audit. Schedule C's are audited at a 3-1 rate over individuals.

As far as the "write off", I believe that is just a term that we all use for taking the interest on our taxes. The taxes paid and interest are all used to reduce tax liability and are usually very lucrative for a second home. I would recommend having at least a piece of property that you call "home" and use the coach as a second. As a primary residence you probably wont see a deduction in your liability.

If what I say seems a lot, talk to an accountant. They will confirm what I say.

[Fleetwood_Coupl]

Thanks, yep already in one WA.

[edbehnke]

it is just related to mortgage payments, writing off the interest. you'd need a lot of interest before you could itemize. over $12+ before you can even consider itemizing.

http://www.irs.gov/uac/Newsroom/Itemizing-vs-Standard-Deduction-Six-Tips-to-Help-You-Choose

if you are a fulltimer then consider a state where there is no income tax and become a resident of that state. i.e. South Dakota

[crabbin_cabin]

The only income tax item you can deduct is INTEREST on a loan you have to pay for that MH,. You cannot claim the cost.

[Dale_Traveling]

As long as the rig complies with IRS Publication 939 (which class A should) -

"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."

The pub number might change for 2014. The sleeping, cooking, and toilet facilities is the key. Most hard sided rigs are in but a pop up might not in regards to toilet facilities requirement.

If rent your rig out or use it for business purposes things get complicated and confusing regarding the deduction and it would be best to seek out competent assistance for advice. Also you might not receive a 1099 from the mortgage holder and will need to determine the amount of interest paid from other means such as a year end statement. You can still claim the interest without a 1099.

[Effy]

No one is "writing off a MH" as a second home. You might be able to claim the interest on the loan but no one is writing off the principal. Even if it's a business you still only get depreciation and maintenance. The reason you can claim the interest is that it's considered a second home if it has a bathroom and bedroom. But if you only have one home and the MH is it, then you don't have a second home. The MH is your primary.

[2oldman]

Fleetwood Couple wrote:
Have always heard MH's could be written off as a second home, but what if you are full timer and have no brick and mortar home? Is there any advantages? This is are first filling since owning.

Assuming you are making payments, I believe the answer is yes.

[enblethen]

It is now your primary residence!