Interest deduction on RV loans

mtdawg · 01-06-2018, 03:33 PM

I just received the latest addition of RV Life. According to them, under the new tax plan they changed the definition of RV limiting it to motorized ones only for purposes of deducting the interest of a loan. This is a pretty significant kick in the pants for those of us with towable on which we are paying. According to the article, the RVIA is working with the Senate and House to change the definition. Man, if this is the case, I hope they do.

Jim

wabirch · 01-06-2018, 05:53 PM

Who knows if the below 'technical corrections' process will include a revised definition -

RVIA says it will work with the House Ways and Means Committee and the Senate Finance Committee to include a change to the definition in a technical corrections bill which will likely be needed next year as other oversights and unintended consequences become known.

But, for now, if buying a towable RV is in your plans, don’t count on taking a tax deduction on the loan interest. If you already own a towable RV and have been deducting the interest, contact your tax professional to learn how this applies to you.

troutslayer · 01-07-2018, 01:08 PM

There was an earlier thread on this. As I understand it, this is for deductions on RVs as "second homes". Guys...you can certainly afford this and don't need government help. jmho

Pfflyer · 01-07-2018, 02:15 PM

Even if it was eliminated, the standard deduction was doubled so unless you had over 24k in deductions, you will still come out ahead. Chances are if you have over 24k you will still come out better with lower rates. If you are used to a multiple page return, with the increased standard deduction, you most likely will have a 1 page return.

These numbers are for married filing jointly.

Gypsea · 01-07-2018, 05:30 PM

Not sure if this forum is the place to discuss the new tax law, but since someone started it... Thanks for the head's up on the '2nd home' loan towable class interest deductibility change. Guess 'we'll have to read the law to find out what's in it'... I also 'heard' the interest on home equity loans may have lost deductibility. The increase in the standard deduction may cover some of these losses, but no one is talking about the doing away with the exemption deduction for each dependent being lost. That loss will quickly eat up any gain in standard deduction... Think we've been hook-winked fellow campers...

**Midnightmoon** · 01-07-2018, 05:43 PM

Quote:

Originally Posted by Gypsea

Not sure if this forum is the place to discuss the new tax law, but since someone started it... Thanks for the head's up on the '2nd home' loan towable class interest deductibility change. Guess 'we'll have to read the law to find out what's in it'... I also 'heard' the interest on home equity loans may have lost deductibility. The increase in the standard deduction may cover some of these losses, but no one is talking about the doing away with the exemption deduction for each dependent being lost. That loss will quickly eat up any gain in standard deduction... Think we've been hook-winked fellow campers...

I've been following the developments fairly closely due to my business (obviously I don't think anyone has a handle on all of this yet) and it appears that the break even point on the deductions will be at 3 children/dependants. 3 or less, the new standard deduction will be favorable. 3 or more would have been better under the old model (not considering the standard rate decrease across the board). Of other interest to me is that it appears that the earned income tax credit will be in play for many more since the threshold will be raised from 110K to 400K for married filing jointly.

Again, there is a lot to learn about this and I'm sure that we will all have a much better picture of this in the next few months.

Gypsea · 01-09-2018, 03:09 PM

Midnightmoon. Your assessment of the tax bill's effect of losing the personal exemption for dependents is only applicable if you're using the standard deduction now and in the future. In that case the change is neutral with 3 exemptions and reduces taxes (all other things being equal) for less than 3. But in the case a person itemizes deductions due to high taxes, interest, medical, and / or donations, then the benefit is not there. Example $20k itemized vs new standard deduction would be neutral for only one personal exemption. The new tax rates will of course determine the final tax bill. We'll have to wait and see. I pity the folks with large families, except they get the child credit for younger ones. Don't think folks are aware of this change. Now back to RVing subjects...

**Crabman** · 01-09-2018, 03:40 PM

So how is that a tax cut if they take away more then they give with dependents? Sounds like a shell game to me, not a tax cut. I was pleased to hear about them doubling the standard deduction until now.

Gypsea · 01-09-2018, 03:49 PM

In regards to mtdawg's original post on this thread, the new tax law eliminating the deductibility of loan interest on towable RVs vs powered ones, makes about as much sense as eliminating it on sailboats vs powerboats. The qualification has been based on having sleeping quarters, bathroom & cooking facilities, ie: self-contained, like a second home. Gotta love those 'well-meaning' legislators...

Drolaw · 01-09-2018, 09:30 PM

Interesting...I visited the San Antonio RV show this past weekend and I spoke to several "reps" about the new Tax law (typical water cooler conversation).

The consciences was that any RV/TT were the bathroom, bedroom, and living area were separate was eligible for the interest dedication.

Don't quote me on it but there were 2 signs (two different dealers) who posted a sign that the interest was still deductible for 2018.

Don't kill the messenger...I'm just telling you what I saw and heard

.

Sundancer330 · 01-09-2018, 09:53 PM

Quote:

Originally Posted by Drolaw

Interesting...I visited the San Antonio RV show this past weekend and I spoke to several "reps" about the new Tax law (typical water cooler conversation).

The consciences was that any RV/TT were the bathroom, bedroom, and living area were separate was eligible for the interest dedication.

Don't quote me on it but there were 2 signs (two different dealers) who posted a sign that the interest was still deductible for 2018.

Don't kill the messenger...I'm just telling you what I saw and heard

.

I sure would not trust a word those bottom feeders say. I would have asked those dealers if they will cover the deduction if it doesn't hold up as stated at this time. Those guys have some pretty big ones to make a statement like that and mislead buyers.

wabirch · 01-10-2018, 06:16 AM

2018 filing date, not 2018 returns filed in 2019 has to be their reasoning

Mad Cow · 01-14-2018, 03:12 PM

They are going to have plenty of folks jumping up and down about this. Technically, the new tax law excludes every second home except a motorized one. That would even include, technically, stick built second homes. So there is plenty of motivation outside of even the RV sector to add clarifying legislation to correct things.

clutch · 01-14-2018, 09:37 PM

One thing you can be sure of is that the government is not going to want less money. Nothing is safe or sacred while the legislature is in session.

Mad Cow · 01-14-2018, 09:56 PM

Man that is soooo true. You can always tell when a politician is lying.... their lips are moving.

But in that regard... many of their supporting constituents have recreational pursuits, second homes, etc that they are going to want protected. So there is a glimmer of hope that things will somewhat return to some normalcy in terms of deductibility of interest.

The actual wording is such that only motorized homes, as second homes, still have interest deductibility. That eliminates every other type of second home. It is tough to imagine that limitation will stand for very long.

GrayHawk · 01-15-2018, 04:25 AM

It all comes down to a guessing game right now...it is a have to wait and see what happens when you file your taxes, then you will know that is for sure.