Tax deduction questions on SMB

alta825 · 07-19-2007, 07:34 AM

I'm finally getting real close to pulling the trigger and have a question regarding the ability to write off the interest on a SMB as a 'second home'
I know the ideal source would be a CPA and it will probabably vary state to state but I figured a couple of you are taking advantage of this and could at least provide a bit of real world experience.
My question is - are you able to write off all or just part of the interest if you finance. And, any difference if I use a RV loan from my credit union or a Home Equity loan (rates/term are very similar).
Thanks guys

D

Ed in Montana · 07-19-2007, 08:23 AM

We used Sportsmobile's financing system from I think it is GE. We are able to take off all the interest just like a second home.

**BroncoHauler** · 07-19-2007, 08:45 AM

If you use a Home Equity Line Of Credit (HELOC) or a Home Equity loan, you can write off the interest. If you use either of these, you can write off the interest regardless of what you buy. Of course, you do borrow against your equity....

When we were looking at ordering an SMB from scratch, we checked with our CPA, and it doesn't sound like it would be a problem as long as it's classified as an RV (the requirements for this vary by state). When Ford did their "no more diesels in vans" announcement a while back, we were ready to use our HELOC to buy a diesel van in dealer stock, and then have it converted to an RV later. This way we could write off the interest from the beginning, rather than wating until it was converted and then classified as an RV.

Herb

smb4me · 08-02-2007, 06:59 AM

Quote:

Originally Posted by jage

The only other consideration is where do you really want to drive out of? Around Indiana and Austin it's pretty darn boring in all directions. Unless of course you're having delivery... if you're picking up Sales Tax might be another issue to consider.

do you pay tax (vehicle registration) on the chassis itself (van) or do you have to pay tax on the van plus the cost of upfitting, which is from 30K and up on average, totally 60K and up.

jage · 08-02-2007, 10:35 PM

In Arizona you pay on the original upfitting- ALL of the original upfitting, 4x4 everything. The problem is that all of the DMV people aren't clear which can lead to some confusion, plus unless you produce the build sheet I'm not sure how they're really supposed to find out.

If I hadn't gotten super-uptight-you're-gonna-have-a-bad-day lady I would have been paying only on the chassis.

I must have asked 7 times before that and gotten the answer "only the chassis" I even had it in writing as an estimated fees.

Instead I wound up with a document stating actual arizona law (every thing SMB does even if they handle a full body graphic is taxable) and a much larger plate payment.

There's some of my experience in http://www.sportsmobileforum.com/viewtopic.php?t=142

**BroncoHauler** · 08-03-2007, 10:39 PM

Not sure if it would work if you b ought and registered the base van, and then modified it. Might cause problems getting it registered, licensed, and insured as an RV though. States seem to know all the ways to get every dime out of you.

Herb

diver110 · 09-15-2007, 11:54 AM

In terms of deducting interest, the general rule is you can deduct the interest on a primary residence and a second home. There is a total mortgage limitation of $1,000,000. A second home includes more things than an actual house, and could include a boat or RV. The general test is does it have the stuff you have in a home, kitchen like set up, bathroom like set up. So a properly equiped SMB should meet the test.

If you pay under the alternative minimum tax system, however, where the rules are stricter, no deduction.

smb4me · 09-15-2007, 08:56 PM

http://www.irs.gov/pub/irs-pdf/p936.pdf

NOTE: Page 2 : qualified home....
'sleeping cooking and toilet facilites....."

deminimis · 07-14-2009, 01:13 PM

Just thought I'd bring this one back up. Pissed me off I didn't think of this when I was paying out thousands in taxes this year. From my reading of the '08 definition of a second home, the SMB qualifies (I have a portable toilet, so I believe that's still part of the def). Here's the IRS doc (see page 2):
http://www.irs.gov/pub/irs-pdf/p936.pdf

Has anyone here taken the second home interest deduction for a SMB loan?? Anyone at all?

MikewTV · 07-14-2009, 01:22 PM

This is interesting that you guys are able to do this. I know SMB touts on their website that you can claim the interest. My CPA in NYC said no way. He said maybe if you were full timing but not if it's just your RV for vacations.