From personal experience, I know that the interest on an RV loan is often tax-deductible like a mortgage loan, as the RV is construed as a second home. I also know that if one were to cash out some investments to purchase other investments, one would not have to pay taxes on the proceeds.
So, my question is, since a second home could be considered an investment, if one were to cash out investments to purchase an RV, would the proceeds be non tax-deductible?
2006-09-28 08:55:11 · 6 answers · asked by skydivemommy 3 in Business & Finance ➔ Taxes ➔ United States
If you sell a capital asset at a gain you will owe taxes on that gain regardless of what you do with the money. The repurchase of another asset, motor home included, will not make it non-taxable. I assume that's what you mean by "non tax-deductible".
2006-09-28 09:04:21 · answer #1 · answered by daoco 4 · 2⤊ 0⤋
I strongly recommend talking to a tax professional. Everything you said you "know" is false. An RV is not treated as a second home unless it includes sleeping, cooking and toilet facilities. The only time selling one investment and purchasing another is not subject to tax on gains is when you sell your Primary residence and purchase a new home. This deferral was replaced in 1997 by a $250,000 exclusion of gain on the sale of a home.
2006-09-28 11:38:01 · answer #2 · answered by STEVEN F 7 · 1⤊ 0⤋
Check irs.gov for deductions for RV. I didnt think you could deduct the loan interest unless it was a home equity loan used to purchase the RV. To answer your question No, an RV is not an investment and cannot be treated as such.
2006-09-28 09:00:43 · answer #3 · answered by hirebookkeeper 6 · 1⤊ 0⤋
I think that you are attempting to describe a 1031 exchange which is a method to sell one asset and buy another without paying capital gain tax on the sale. That only works with business or rental property and must be like kind property. If you own a rental RV and sold it to buy another Rental RV of greater value that would work. 1031 exchanges are rather complicated and clearly should only be handled by experienced tax and legal professionals.
2006-09-28 19:47:28 · answer #4 · answered by ? 6 · 0⤊ 0⤋
No, you would have to pay taxes on gain of the investments. As usual, if the investments were held for over a year who would get the more favorable capital gains rate.
2006-09-28 09:01:05 · answer #5 · answered by Wayne Z 7 · 1⤊ 0⤋
No. only loan pastime and genuine property taxes are deductible. the only exception is that if you're employing component of your position as your position company. (the gap must be 100% dedicated to the corporate, and by no skill used for the different purpose. then you actually would deduct the % the corporate squarepictures is to the completed abode, on all expenses of the abode (warmth electric powered, coverage and improvements) you may also deduct a drepreciation for that % of the abode)
2016-11-25 01:07:22 · answer #6 · answered by mic 4 · 0⤊ 0⤋