We all just endured another tax season, so while the topic is still fresh on our minds, we wanted to share with you what might be a little-known fact so you can take advantage of a possible deduction of your RV costs next year. Living at home doesn’t necessarily mean you have to be tethered to one place. For federal tax purposes, a boat or a recreational vehicle can be either your main or secondary residence, entitling you to take advantage of the same tax deductions as a homeowner of a typical house.
A home is broadly defined by the IRS.
The Internal Revenue Service (IRS) defines a home broadly, allowing the term to encompass:
- Houses
- Condominiums
- Cooperatives
- Mobile Homes
- RVs
- House Trailers
- Boats
The test the IRS applies is simply that the property has to have all three:
- Sleeping
- Cooking and
- Toilet facilities
If so, it can be treated as a primary or secondary residence for tax purposes.
Rules for declaring your RV as your main home.
The IRS allows taxpayers to designate one residence only as a main home at any one time. Your main home is the one where you ordinarily live most of the year.
This can be a boat or RV even if it doesn’t have a permanent location. As long as it contains the required facilities, you can claim it as your main home on your taxes.
The benefit of treating a boat or RV as your primary residence, is to take allowable homeowner tax deductions that can decrease your overall tax bill. As long as the boat or RV is security for the loan used to buy it, you can deduct mortgage interest paid on that loan.
In the event you decide to move back into a more traditional house, your boat or RV can also be treated as a qualified second home, and the same homeowner deductions apply.
What if you use your RV as a residence and a mobile office?
It’s more common than ever that people are working remotely, especially when traveling in RVs. The only part of your RV that qualifies for homeowner tax deductions is the portion used for residential living. This issue arises, for example, if you use your RV to provide business tours, or if you have a dedicated area in your RV that you use as a home office.
To receive full tax benefits, you’ll need to divide your home between the part that is your primary residence and the part that is used to generate income. You can then use these portions to allocate the appropriate deductions between personal itemized deductions and business deductions.
Looking for your first or second RV home?
Whether you’re looking for a full-time or part-time residence, we can help find a luxurious motor home that gives you luxury, style, modern convenience, and the freedom of the open road. To learn more, visit our ever-changing, hand-picked inventory at https://motorhomefinders.com/inventory. Likewise, if you have a class A RV for sale, we can help you with that, too. We have a waiting list of buyers who are highly motivated to take to the open road in your luxury RV.