Tax Benefits of Buying an RV

Recreational vehicle (RV) owners are able to take advantage of several federal tax benefits. The Internal Revenue Service allows RV owners to deduct the interest on their qualified RV loans if they use their vehicles as primary or secondary residences; in previous tax years, the IRS allowed them to take advantage of the First-Time Home Buyer's Tax Credit and sales tax deduction. Although the sales tax deduction program and First-Time Home Buyer's Tax Credit program ended, RV owners can still deduct their mortgage interest.

Interest Deductions for RV Owners

The IRS allows RV owners to deduct the interest they pay on their qualified RV loans. Qualified home or RV loans are those lenders use to secure repayment of their loans, and owners pledge their homes or RVs as collateral in exchange for their loans. Taxpayers can only deduct their mortgage interest on their qualified home loans if they use their RV or residential home as their principal residence or second home.

Limitations on Rentals

RV owners can use their RVs as their main homes, second homes or vacation homes, as long as they do not rent them for profit. RV owners are not required to actually use their vehicles as their second or vacation homes as long as they do not use them as rentals. If they use them as rentals, however, they must also actually use their vehicles as second homes or vacation homes during the periods when the RVs are not being rented.

Itemization

RV and residential real estate owners can deduct their mortgage interest on their Schedule A tax returns if they itemize their deductions and their purchases did not exceed $1 million. Since most RV owners can easily stay within this maximum limit, they can deduct their qualified loan interest payments.

Minimum Living Areas

RV owners qualify for the mortgage interest deduction if their RVs have designated minimum living facilities. Minimum living quarters include a designated and permanent sleeping area, eating and kitchen area, toilet and storage area.

References

About the Author

Jill Stimson has worked in various property management positions in Maryland and Delaware. Stimson worked for the top three property management companies in the commercial industry and focuses her career on property building logistics and tenant relationships. She holds a Juris Doctor and a Bachelor of Science in psychology.