You Make the Call - July 11, 2024

Question: Christopher was recently able to fulfill his lifelong dream by purchasing a recreational vehicle (RV) to travel in. He has decided to spend all summer touring the Midwest in his new motor home. The RV is equipped with on-board permanently mounted sleeping, cooking and bathroom facilities. He paid $200,000 of the purchase price in cash and got a loan for the remaining $100,000 and the loan was solely for the RV purchase. He will not be renting it or using it for other business purposes. Chris has no other mortgages. He otherwise itemizes his deductions and would like to know: could his RV count as a vacation home in order to deduct the interest he is paying on the loan?

Answer: Yes. A deduction is allowed for qualified residence interest (commonly called the “mortgage interest deduction”) for a taxpayer's principal home, as well as one other additional home used as a residence during the taxable year. IRC §163(h)(3); IRC §163(h)(4)(A)(i). According to Temp. Reg. §1.163-10T, an RV is considered a residence, so long as the mobile home has sleeping, lavatory and cooking facilities. Christopher will therefore be able to deduct the interest he is paying as home mortgage interest, on Schedule A (Form 1040), Itemized Deductions.