In 2009, as part of the American Recovery Act, individuals were able to write off sales tax on vehicles, including motor homes, purchased after Feb. 16, 2009, and before Jan. 1, 2010. This deduction was a one-year deal, however. So, unless you are using your motor home for business or giving it to charity, the only way you can write off your motor home beyond 2009 is to make it your second home. By making a motor home your second home, you will be able to write off the interest paid to purchase the motor home.
Qualify your motor home to be a second home. The IRS allows you to write off interest paid to purchase a primary home and a second home. A motor home is eligible to be your second home as long as it has sleeping, cooking and toilet facilities. You do not have to use your motor home if it is not rented out during the year. If it is rented out, you must live in it the greater of 14 days or 10 percent of the days it was rented out.
Stay below mortgage acquisition limitations. The IRS allows interest to be deducted on home loan balances that are less than $1 million. The $1 million limitation is for the the primary and second homes combined. This amount is reduced to $500,000 for married individuals who file separately.
Use your motor home to pay for a business or investment. Even if your motor home is paid off, you still may use it for a write-off. You can take out a loan against your motor home and use the proceeds to pay for a business or investment. The interest on this loan can be written off. The IRS limits this home equity interest to $100,000. This amount is reduced to $50,000 for married people who file separately.
Report interest on schedule A. All interest that is written off on your motor home is considered an itemized deduction. You claim this deduction on schedule A of your 1040 form.
Document repairs and improvements made to your motor home. Although repairs and improvements to your motor home are not deductible, they do increase the basis of your property. Your tax basis replaces the actual purchase price. This benefits you when you sell the motor home. The higher your basis, the smaller your income. The smaller your income, the less tax you will need to pay.