RV Loan Interest Tax Deduction

What is the RV loan tax deduction and where to find accurate information.

You can still deduct Motor home and RV loan interest from your IRS tax return – according to the Internal Revenue Service 2020 Publication 936 - Cat. No. 10426G, just the same as residential home mortgage interest on the first $750,000 ($375,000 if married filing separately).

The vast majority of individuals who finance their recreational vehicle qualify to deduct the interest on their RV loan as a primary or second home. Not only will you be able to enjoy the benefits of RV travel, you will likely receive a mortgage interest deduction as well.

The IRS description qualifies virtually every type of recreational vehicle on the market today! Even pop-up campers may qualify under this description.

To be used as a Qualified Home, the IRS has ruled that:

1. The RV must be used as security for the loan.

2. The RV or Motorhome must be your primary, or secondary/vacation home.

3. The RV must have basic sleeping, cooking, and toilet facilities.

Nearly all RV types & motorhomes, travel trailers, truck campers and many folding camping trailers are equipped with the “sleeping, cooking, and toilet facilities, however you should remember that the RV must be your primary residence, or your second residence, (or vacation home) to be recognized as a qualified home.

When is the RV a Qualified Home for the Tax Deduction?

For your RV loan and qualifying fees to be used as a “home mortgage interest deduction”, it must be secured by financing. A qualifying home could be a house, condominium, motorhome, travel trailer, power boat, cabin cruiser, or a similar property that has sleeping, cooking, and toilet facilities.

More Types of RV and Motor Home Qualifications

The interest you pay on financing on a THIRD TYPE of home (or motorhome) in addition to your PRIMARY or SECOND home may be deductible if the proceeds of the loan were used for:

1. 1. Business
2. 2. Investment
3. 3. Other deductible purposes

Otherwise, it is considered personal interest and isn't deductible.

Main or Primary Home or Recreational Vehicle.

You can have only one MAIN home at any one time. This is the home where you ordinarily live most of the time. It is normally a typical, land-based residence. However, in the majority of cases, if you live full-time in your RV as a primary residence, you should qualify for the “RV or home interest deduction.”

Second Home or Recreational Vehicle

A second home is a home that you choose to treat as your second (non-primary) home. In addition to a vacation home, It could also be a motorhome, travel trailer, 5th wheel, power boat, or cabin cruiser with the qualified facilities listed above.

Second homes or recreational vehicles are those which are used on a temporary basis. They can be vacation homes or RVs used for vacations, or any other combination of primary use and temporary use.

Who Can Use the RV or Motorhome Tax Deduction?

According to the Internal Revenue Service 2020 Publication 936 - Cat. No. 10426G – You can still deduct your Motor home and RV loan interest – just the same as residential home mortgage interest on the first $750,000 ($375,000 if married filing separately).

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Taxpayers may not claim the interest from more than two qualified homes on their tax returns. Ask your tax adviser for more information. The information contained within this article is meant to be helpful and informative, but not to take the place of advice from your financial consultant, accountant or other professional.

This IRS description qualifies virtually every type of recreational vehicle on the market today! Even pop-up campers may qualify under this description. All you would need is a simple stove and porta-potty. So enjoy the benefits of RV travel and get a tax advantage too!