Tax question - RV-Dreams Community Forum

cherylbrv · RV-Dreams Family Member

Tax question

Lucky Mike · RV-Dreams Family Member

it is state specific.........but in most states depending on the rv it can be claimed as a second home and payments can be counted as a mortgage.

As far as taxes for fulltimers and related codes.....fulltimer is not part of the equation........All taxes will be the same as if your in a stick and brick in the state you use as your domicile......if you make taxable income on the road (other than cash..LOL) you will be liable for state taxes in which it was earned and federal and state in your domicile....

I would go to your bank and speak with a financial adviser. and go from there....prior to paying a CPA for the same info.

cherylbrv · RV-Dreams Family Member

I should have mentioned that we will not be financing anything. All proceeds will come from the sale of the house. Not sure if that will make a difference. But thanks for the advice!

I was jumping the gun a little wrt the CPA -- I'm thinking about once we go full time. Our current accountant doesn't have a clue how these things work.

VanMar · RV-Dreams Family Member

Cheryl,

The big question is, how long has this house been your primary residence? I think the laws have changed so you need to check this out. At one time, if you were under the age of 55, you could have a one-time pass on capital gains from the sale of your primary residence. Then, the rule was as long as you purchased another house of equal or greater value you didn't need to worry about capital gains. Now, I think if you have lived in the house continously for the last two years you don't have to pay capital gains. At one point I was hearing you only had to pay tax on gains exceding $250,000. If your accountant is your tax preparer, he should be able to answer that question. When we sell, we will have been in this house two and a half years and hopefully won't have to pay taxes on the gains.

These may all be scenarios from the past. We will ask our preparer when we get our taxes done.

Vance

cherylbrv · RV-Dreams Family Member

He will know abou the capital gains; I just don't think he'll know much about full timing in an RV, but I will pprobably need to find someone in FL once I establish that as my domicile. Again, I'm looking too far ahead rigt now.

Lynn and Ed · RV-Dreams Family Member

Cheryl,

You may find the following IRS website helpful: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Sale-of-Residence---Real-Estate-Tax-Tips

Although you should confirm this information--if the below applies to your situation and your profit is lower than $250/500K, you don't need to worry about if you can/cannot rolling over the profits into the RV.

Ownership and Use Tests

To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:

Owned the home for at least two years (the ownership test)
Lived in the home as your main home for at least two years (the use test)

Gain

If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).

If you can exclude all of the gain, you do not need to report the sale on your tax return
If you have gain that cannot be excluded, it is taxable. Report it on Schedule D (Form 1040)

Loss

You cannot deduct a loss from the sale of your main home.