Questions about financing a 5th wheel rv and a truck

Please forgive me if this is the wrong place for this question.

My wife and I are planning on buying a large 5th wheel rv and a truck, probably a Ford F650, to pull it with. A friend of mine told me that if I can arrange financing to where the 5th wheel and truck are under the same note I can write off any interest from my taxes as a second home. Is this true? Anyone have any advice on finding a lender that handles loans of this type?

Thanks,

Ken Gordon
Fairbanks, Alaska

Ken,

I can't answer your question. Hoping others may know the answer. Also consider contacting your tax preparer.

With regard to the F650 - um, WOW! That's a big truck. You'd want a custom RV hauler bed on it. If I had the budget for such a beast, I'd also strongly consider an M2 Freightliner with a custom RV hauler package or maybe even a class 8 tractor, singled out with a custom bed. Lots of options in the F650 budget range. Have fun and I hope you become part of the Heartland family.

Jim

Ken, Welcome to the forum. One can deuct the interest (only) paid on a second home. It is considered a secondary domicile, your permanent residence is your primary domicile. A residence with a kitchen and bathroom is considered a domicile whether it floats, rolls or is glued to terra firma. Translated, you can deduct the interest on a boat, RV or cabin. In reality, this equates to zero (0) percent interest on the loan regardless of what the bank rate is. These loans can be gotten for up to 20 years. You can only have 2 domiciles without getting exotic on your taxes. The interest on the Ford 650 is out. However, you can deuct the cost of registration (tags) from your federal taxes. 'IF' you had purchased an RV in 2009 you could have deducted the taxes, it was part of the economic stimulus package that Congress signed into law. Ken, the 650 is a nice TV... but smaller less costly units work fine also and are more economical to operate. I just bought a BH 6780RL it weighs 12,200 empty and 16,000 max load. I pulled it home from the dealer (empty) with a 2500HD (3/4 ton) which has a 8.1L (502 cu in) gas engine, Alison 5 speed and it handled fine. However, I purchased a 3500HD (1 ton) Diesel, Alison 6 speed just to give me a cushion when Patti & I put all our "Stuff" into the RV. Ford, Chevy & Dodge 1 tons cost about $ 50,000 + to buy & set up to pull a 5th wheel. They also can be used for that side business you are going to start. Then 'ALL' the cost can be deducted from your LLC taxes. Some who have the Tim Allen complex (more power) will swear I am wrong, thay just gotta pull into camp driving a behemouth that has stairs or ladders going up to the cab. In the end it's your choice, but I suggest you and your accountant sit down before you sign on the bottom line and make the choice that's best for you and your family. When it comes to technical questions many experienced members on this forum will help you, thay are a wealth of knowledge and they are glad to help - just ask, again welcome.

kodiakken said:

Please forgive me if this is the wrong place for this question.

My wife and I are planning on buying a large 5th wheel rv and a truck, probably a Ford F650, to pull it with. A friend of mine told me that if I can arrange financing to where the 5th wheel and truck are under the same note I can write off any interest from my taxes as a second home. Is this true? Anyone have any advice on finding a lender that handles loans of this type?

Thanks,

Ken Gordon
Fairbanks, Alaska

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I know in regards to the tax question so long as your RV contains a bath kitchen and bedroom its considered a second home. I can't remember the IRS reference off top of my head but its a legal as a second home.

Ken, Welcome to the forum.
If you own a home you might look at an Equity Loan for the total amount of the truck and trailer plus a little spare. A loan like this has a low intrest rate. Also if you use this type of loan the truck and trailer are paid off.

If you don't use an equity loan, I don't know how you can finance both on the same loan. If you finance the truck seperately you can not deduct the intrest from taxes. Then you have to finance the trailer on a seperate loan and it might be deductable.

We did the Equity loan and it worked out great. I found that a Credit Union gave me the best loan intrest.

FWIW
BC

RollingHome said:

Ken, Welcome to the forum. One can deuct the interest (only) paid on a second home. It is considered a secondary domicile, your permanent residence is your primary domicile. A residence with a kitchen and bathroom is considered a domicile whether it floats, rolls or is glued to terra firma. Translated, you can deduct the interest on a boat, RV or cabin. In reality, this equates to zero (0) percent interest on the loan regardless of what the bank rate is. ....e

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Tom.
Might want to double check your math there. It's a tax deduction - not a tax credit. The effective interest rate depends on your tax bracket, but its not 0%.

Thanks to everyone for your answers.

If we go this route we will be selling our home in Fairbanks, Alaska, and 5th wheel will become our primary residence. We won't really be 'full timers' because I have a job that requires me to be on location for two weeks at a time but then I'm off site and free to travel for two weeks. (I work at an oilfield camp on the North Slope of Alaska.) My wife will be free to go and stay with her parents or other relatives while I'm away.

We plan on living in Arizona in the winter and Alaska during the summer. The reason for the larger than needed truck is since I will be driving back and forth through the mountains I want the best brakes I can buy.

Again, thanks for the answers.

Ken Gordon
Fairbanks, AK

Gordon
We did about the same thing you are talking about.
As I said above we got an equity loan to buy our Truck and Trailer. Low intrest rate and we own them out right. When the home sold the loan is paid by the Title company and now you have no more loan. You just used the equity in your house & land to buy the RV. You don't have to worry about going full time and having to pay a loan. Your debt free and used future money.

BC

Oregon Bob,

I knew some eagle eye accountant would debate me... that's why I included the CYA clause "see your accountant" . You are correct, it is a Tax Deduction not a credit, good catch. However, in PA where I live, the tags are horrendous. I pay about $ 250.00 a year for the TV and then the BH tags. Throw in all the "deductions" and other "legal" deductions and it comes close to a wash ( 0%) in my case. Oh sure, it's not actually 0 but when all the smoke clears, it ain't much. As you know, the laws change every year to keep accountants and Quicken in business so it is wisest to get the pro's help. All the more so since Ken's RV will be his primary domicile... heck, he can buy a boat and take the interest as a deduction, he's got it made.