Deductible Home Loan Interest
You can deduct home loan interest secured by a qualified main or second home. Secured debt means you use your home as collateral on the debt, and if you can’t pay, the lender can use your home as payment. Your main home is where you live most of the time; only one home can qualify as your main home at any point in time. A second home is another qualified home, which may include a motor home; you can only deduct the interest from one mortgage for a second home.
A qualified home must include a sleeping area, a cooking area, and toilet facilities. Most motor homes contain these amenities, so you can deduct motor home loan interest on your taxes as long as the motor home secures the loan. If you rent out your second home at any time during the year, you must use it for personal use at least 15 days of the year, or more than 10 percent of the number of days you rent it. For example, if you rent your motor home out for six months of the year or 180 days, you must use it personally for at least 19 days throughout the year.
Reporting Motor Home Loan Interest
If you do not itemize your deductions on Schedule A, you cannot deduct home loan interest. Most lenders report mortgage interest on a Form 1098. Include this interest on line 10 of Schedule A. Interest on a motor home loan might not be reported on a Form 1098, however, especially in a seller-financed transaction. In that case, include the interest on line 11 of Schedule A. You also must also lender information for non-1098 home loan interest. On the lines next to line 11, report the lender’s name and address, and their taxpayer identification number, which is a social security number, individual TIN issued by the IRS, or employer identification number. Failure to report this information correctly may lead to penalties.
Although you can deduct motor home loan interest on your taxes, it may not always be in your best interest to do so. Evaluate your total itemized deductions and compare them to the standard deduction before filing your tax return. In most cases, it is advantageous to itemize deductions when you have a primary mortgage and a mortgage for a second home, but if the loans are small or near payoff, the standard deduction may be higher than your total itemized deductions. If you are unsure whether to itemize, contact a tax professional to discuss your specific situation.
Internal Revenue Service Publication 936: Home Mortgage Interest Deduction - https://www.irs.gov/publications/p936/ar02.html
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