Tax deduction as 2nd home - RV-Dreams Community Forum

EggerMar · RV-Dreams Family Member

Tax deduction as 2nd home

Jake62 · RV-Dreams Family Member

Yes!

Although we don't have an RV right now, we've used this deduction in the past. Please refer to IRS Publication 936. The relevant section states that you can deduct the interest on a qualified home, which is defined as your main or second home:

Qualified Home
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 interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. Otherwise, it is considered personal interest and is not deductible.

Main home. You can have only one main home at any one time. This is the home where you ordinarily live most of the time.
Second home. A second home is a home that you choose to treat as your second home.

Terry and Jo · RV-Dreams Family Member

Check with your RV's loan company. While we've been in our fifth wheel for 3 years, we've never received a Form 1099 (or whatever is needed) from our loan source. Thus, we've not been able to try that for reducing our income taxes.

I guess I ought to call and see if there is some process by which we could receive 1099's.

Terry

Jake62 · RV-Dreams Family Member

Terry,

I believe you're confusing a 1099 vs. a 1098.

A 1099 reports income: 1099-DIV is for dividends; 1099-INT is for interest; 1099-R for retirement income, etc.

The 1098 reports interest you can deduct; however, according to the IRS, you may claim an interest deduction on your primary or secondary home if you do not receive a 1098. Just ensure you can prove you paid interest to your lender which would be considered "deductible" pursuant to the IRS publication cited above.

Terry and Jo · RV-Dreams Family Member

Thanks, Tim. I'm neither an accountant or a tax professional, so I wasn't sure of the exact form number. I'll have to ask Jo if there is any document showing the amounts of interest paid that we might have access to. We got our RV loan through USAA. Now, with our plans to move from Oklahoma to Colorado next July, we will no longer have access to what has been our bank for checking and savings for the last 20+ years. We now have all of that through USAA so that it will be easier to be banking, even when we actually get to start traveling.

Terry

Jake62 · RV-Dreams Family Member

Terry, you simply can't beat USAA! Mobile banking is the only way to go.

We had a "second mortgage" up thru last year with USAA and they did not send us a 1098, but I ensured I kept my records from USAA just in case the IRS came a calling ...

53 Merc · RV-Dreams Family Member

Terry and Jo wrote:
Thanks, Tim. I'm neither an accountant or a tax professional, so I wasn't sure of the exact form number. I'll have to ask Jo if there is any document showing the amounts of interest paid that we might have access to. We got our RV loan through USAA. Now, with our plans to move from Oklahoma to Colorado next July, we will no longer have access to what has been our bank for checking and savings for the last 20+ years. We now have all of that through USAA so that it will be easier to be banking, even when we actually get to start traveling.
Terry

We also use mobile banking. Simple effort to go to the bank website and print out the year's activity. It will have the YTD interest on it.

Selah · RV-Dreams Family Member

I would check with a qualified tax person as I believe the key word in the IRS publication is "or". You can take the interest on the greater of the two but not both?
I will find out for sure later when I send all my tax stuff to my accountant. Right now it is all too complicated for me to figure out.

jrzygrl64 · RV-Dreams Family Member

Sounds like you have some amendments to file, Terry!

Jake62 · RV-Dreams Family Member

Selah, Your interpretation of "or" is not correct. So, for clarification, let me include another cite directly from the IRS website for clarification, under the "Help & Resource" tab:

http://www.irs.gov/Help-&-Resources/Tools-&-FAQs/FAQs-for-Individuals/Frequently-Asked-Tax-Questions-&-Answers/Itemized-Deductions,-Standard-Deductions/Real-Estate-(Taxes,-Mortgage-Interest,-Points,-Other-Property-Expenses)/Real-Estate-(Taxes,-Mortgage-Interest,-Points,-Other-Property-Expenses)-5

Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses)
Question: Is the mortgage interest and property tax on a second residence deductible?

Answer:
The mortgage interest on a second home, which you do not rent out during the taxable year, is generally deductible if the interest satisfies the same requirements for deductibility as interest on a primary residence. If you rent out the residence, you must use it for more than 14 days or more than 10% of the number of days you rent it out, whichever is longer.
The combined limitation for mortgage interest on your primary and secondary residence is $1,000,000 for acquisition indebtedness and $100,000 for home equity indebtedness.
Real estate taxes paid on your primary and second residence are generally deductible.
Deductible real estate taxes include any state, local, or foreign taxes based on the value of the real property levied for the general public welfare.
Deductible real estate taxes do not include taxes charged for local benefits and improvements that increase the value of the property, such as assessments for sidewalks, water mains, sewer lines, parking lots, and similar improvements.

-- Edited by Jake62 on Monday 3rd of February 2014 05:15:29 AM

bigredoes · RV-Dreams Family Member

Please feel free to send the IRS money they don't deserve - that way they can stay off of my back.... biggrin

Terry and Jo · RV-Dreams Family Member

jrzygrl64 wrote:
Sounds like you have some amendments to file, Terry!

We'll have to check the past years, but for this year we haven't paid yet, so we may have time to check this out. Thanks to all for your comments. Maybe we'll get enough back to buy me a new camera lens?

Terry

jrzygrl64 · RV-Dreams Family Member

You can go back 3 years, so 2010, 2011, and 2012 can all be amended. Hope you get more than enough for that lens!

NWescapee · RV-Dreams Family Member

Terry - we just received a statement - not an official IRS form on the interest paid for 2013. The bank just sent a letter stating the interest paid. We didn't have a huge amount since we paid the RV off when the house sold, but I'm still claiming it as our second home.