Discussion:Camping trailer
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Jcbostic57 (talk|edits) said: | 13 November 2007 |
| Can anyone direct me where to find the guidelines for deducting mortgage interest for camping trailers? Is this possible?
Peace and abundance! Jane B. | |
Death&Taxes (talk|edits) said: | 13 November 2007 |
| But check AMT rules for deducting this interest if the trailer is moveable, as opposed to sitting on a cement slab. Key phrase is 'not used on a transient basis.' | |
| 13 November 2007 | |
| Jane,
Perhaps the reference you are looking for is in Sec. 163(h)(4)(A)(i)(II), which allows mortgage interest deduction for principal residence and one other qualified residence, & Reg. 1.163-10T(p)(3)(ii) provides definition of qualified residence: "Definition of residence. Whether property is a residence shall be determined based on all the facts and circumstances, including the good faith of the taxpayer. A residence generally includes a house, condominium, mobile home, boat, or house trailer, that contains sleeping space and toilet and cooking facilities." You would claim the mobile home/house trailer as the taxpayer's second residence and could deduct the interest paid on this second residence. As D&T notes, however, this interest is not deductible for AMT, so if TP is subject to AMT, then the interest deduction might be lost. I don't know the source for the AMT definition of "qualified residence," though one source I was reading referred to Sec. 163(h)(4)(A)(i)(II), which is the same for regular tax but does not have any other references to the "transient" nature of the residence, which is the key phrase here. Just not sure where it comes from? Separate AMT regs on interest? | |
Death&Taxes (talk|edits) said: | 13 November 2007 |
| Go to Sec. 56(e)(2)(D) where it states "mobile home not used on a transient basis (within the meaning of section 7701(a)(19)(C)(v) )," when trying to define which mortgage interest is not added back for AMT. | |
| 13 November 2007 | |
| D&T, got it. Great, thanks. I figured it was there somewhere with the AMT stuff. | |
Actionbsns (talk|edits) said: | 14 November 2007 |
| I just have a question on this issue, no client or pending result, just a question. If someone is required to travel for their job to a location and stay there for a period of time, and they purchase a motor home or travel trailer, will the interest qualify as mortgage interest, or will it be considered to be used on a transient basis? I ask because my dad used to do that a long time ago for Southern Calif Edison. There was a whole work crew who went from one steam plant to another. Edison would put them up in hotels, but my dad preferred the comfort of the camper. BTW it was self contained and had cooking facilities. | |
Death&Taxes (talk|edits) said: | 14 November 2007 |
| You would want to deduct it as mortgage interest. It is a well established principle that the employee cannot shift the expense from the employer to the employee....i.e., if he could be reimbursed, he cannot deduct the expense except perhaps for the amount over and above any potential reimbursement.
One old case on this is Horace Podems (24 T.C. 21 (1955), who I believe was an IRS auditor [read the case years ago so the details are foggy]. Podems deducted auto and did not submit for reimbursement. | |
RoyDaleOne (talk|edits) said: | 5 March 2009 |
| I would suggest that the term "transient basis" as used in 7701 is defined as:
(8) RESIDENTIAL REAL PROPERTY. The term "residential real property" means real property which consists of one or more family units. A
family unit is a building or portion thereof which contains complete
living facilities which are to be used on other than a transient
basis by only one family consisting of one or more persons. Thus, an
apartment which is to be used on other than a transient basis by one
family, which contains complete facilities for living, sleeping,
eating, cooking, and sanitation constitutes a family unit. Hotels,
motels, dormitories, fraternity and sorority houses, rooming houses,
hospitals, sanitariums, rest homes, and parks and courts for mobile
homes do not normally constitute residential real property.
In light of the foregoing, I would suggest the the term "transient basis" as used in Section 7701 is meant to mean facilities like a hotel where the stay is 30 days or less and not "mobile" as in an RV. Therefore. I would conclude that there is no AMT adjustment associated with the residential interest deduction on a second residence such as an RV. | |
RoyDaleOne (talk|edits) said: | 7 March 2009 |
| Having review my above comment, and, after a more careful assessment I disagree with my comment above.
I would suggest that for AMT purposes the mortgage interest deduction is the same as for regular income tax purposes, with the exception, that mortgage interest must be on a mortgage of real estate property, including a mobile home that is used on a regular basis as a home (i.e. non-transient), all other mortgage interest deductions allowed for regular income tax purposes are disallowed for AMT purposes. Therefore, the interest deduction on a boat, RV, airplane, or any non-real estate property home is not allowed for AMT purposes. | |
Death&Taxes (talk|edits) said: | 7 March 2009 |
| I agree with your definition of 'transient.' One more reason I love this site, but I truly wondered why several books kept giving the conclusion you reached in your last post. | |
