I made my annual pilgrimage to the tax man a today. He agreed that our new Montana can be considered a second home and that any interest paid on a loan for that trailer along with the sales tax can be deducted based on this:

"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. "(Publication 936 (2014), Home Mortgage Interest Deduction)

So, with that said, I hope ya'll already know this as this is the first time we have taken a loan for any trailer - and in our case, doesn't amount to much more then an evening out at a posh McDonalds - but it might be a few bucks that our government can't waste on $7000 toilets or $1000 claw hammers for airplanes.

 

I tried this once before and got nabbed but that was 15 years ago and maybe things have changed...

I think it was the Sales Tax that got me - I don't remember right off and we just got done destroying all documents older than ten years..

 

We took this deduction for years, though not in a long time.

 

Did you write off the Sales Tax though?

Taking the deduction you can get by maybe for years without getting caught - then suddenly you get this letter in the mail...

I freaking HATE it when that letter comes....

 

The problem with this deduction is it is based on time used. You can only claim the interest as a deduction for the time you are staying in the trailer. Not all year. And, for the term you are in the RV and claiming the deduction, you then can't claim the interest on your home mortgage. For every day of the year, it's one or the other. Not both.

 

Here is the link to the IRS document references second homes' interest deduction. I don't see where it says that. http://www.irs.gov/pub/irs-pdf/p936.pdf

 

It doesn't say it. However it is the rule of law or at least it was a few years back when I was going to do it so I passed.

 

I am not sure what the "rule of law" means. The IRS is bound by it's own regulations. We deducted interest on RVs for something on the order of 30 years.

I guess the best course would be to check with your CPA when in doubt. Ours said no problem and there wasn't.

 

The "rule of law" means that's the law. Pretty self explanatory....LOL. Their regulations are THE LAW. It's not always followed or enforced but if ever you were audited, then you would be in the wrong. Lot's of things aren't problems unless you are audited. Again, not sure if it is still the case but as of 5 year ago, it was. Verified by two CPA's that I used. I no longer have either a mortgage or a RV loan so I have no need to investigate further. But, it would be prudent to check with a CPA to find out if this is still the case...

 

If theIRS regulations are "THE LAW" and it is not in their regulations, I don't see how it is the law.

This is just something we will disagree about as apparently do our CPAs, the RVDA, and Turbo Tax.

 

I'm not going to debate it with them! LOL. They scare the bejesus outa me...

 

I have dealt with them twice and it ended well both times. One time I was actually in the wrong and they forgave everything I owed, although the amount was only a few hundred dollars. The toughest part is it takes so darn long to get anything resolved, so I had to go ahead and pay what they said and then wait to get it all back.

I did find that trying to talk to them on the phone was a total waste of time as I was quickly convinced the person on the other end of the phone knew less about the tax code than I did! We have also had a CPA make a mistake that cost us thousands, so we try not to take anyone at their word.

 

I hope you just knocked on wood...

 

Man, I hit myself on the head so often I am brain dead!!

 

I've never yet had a nice conversation with those blood su______ errrr nice government people YET!!!!!

After I sold my business, they took me apart every year for 5 years running.... Every time, they would dig a bit deeper.. When I protested, they said that maybe I was right and a full audit would be in order....