In this solo presentation, CPA‑attorney and RV owner Mark Kohler explains how recent tax law changes affect RV owners and outlines ways to legally deduct RV‑related expenses. He first warns that the Tax Cuts and Jobs Act (TCJA) eliminated the ability to treat an RV as a second‑home mortgage interest deduction and bars using a HELOC for that purpose. He then shifts to the primary avenue for tax benefits: using the RV as a business asset. Kohler describes how full‑time and part‑time RV living impact tax strategy, covering domicile selection to avoid state income tax, mileage versus actual expense deductions, depreciation, and Section 179 expensing. He highlights the pros and cons of each lifestyle—full‑time owners can gain state‑tax savings and mileage deductions but cannot depreciate the RV, while part‑time owners can allocate a business‑use percentage to write off fuel, maintenance, interest, and even fully depreciate the vehicle. He also notes the difficulty of claiming a home‑office deduction in an RV due to exclusive‑use requirements and recent unfavorable case law. Throughout, Kohler emphasizes evaluating personal circumstances to choose the optimal tax approach and directs viewers to his broader library of tax, legal, and small‑business resources.
Chapters
Hi, Mark Kohler here and I want to talk tax and legal strategies for RV owners. Now this is coming from a fellow RV owner. Yes, I own a Winnebago Mini. Now don't let the name confuse you. It is a 27 foot RV I pull behind my Yukon. It's pretty cool and I'm pretty excited. Now I'm also a CPA attorney and small business owner and I've got some tips for you. If you own an RV and we're going to break down pros and cons, you're gonna love it. Now first the bad news. Under the new Tax Cuts and Jobs act, you cannot write off the RRV as a second home any longer. And that meant the interest on the loan to buy an RV was typically going to be this second mortgage scenario. Second home write off, no longer in 2018 until 2025 and the law changes. Also, you cannot use the HELOC home equity line to buy an RV and think you can write off the mortgage interest. Now, under the Tax Cuts and Jobs act, you can only write off the interest on your acquisition indebtedness for your primary residence. I've got other videos on the Tax Cuts and Jobs Act. Watch them learn it. But that's the bad news. I've still got some good news. Now the main place you can write off an RV is as a business owner. Now if you're not a business owner, don't give up yet. Don't turn the video off. I've got a couple other golden nuggets here, but that's where we're going to be able to write this off. Not as a second home or the interest on a second home or a second mortgage. To write off the interest, we got to think small business. So let's look at the pros and cons of full time or part time ownership and having that RV be part of your business. Maybe to get you to your rental properties to check on them, to go to conferences, to go to shows, to go to conventions, maybe to go work on a rehab property, go pick up supplies. That RV becomes a unit to drive around to go to your next client, your next meeting, something like that, where you're going to travel some distances. The RV becomes a business vehicle. That's the concept that we're going to play with here. Now again, full time, part time. Yes, there's people out there that live full time in an RV. Now the full time RVers get really two major benefits. One, they can choose their domicile. What that means is they can say, hey, I don't want to pay California taxes anymore. Going to become a resident of Nevada with my RV or South Dakota or another state. That could work out well. Texas or Florida. Think East Coast, West Coast. There are some states out there that don't charge state tax. Think Washington. Now when you move out of your primary residence and you don't own a home anymore and you're in this RV full time, you can set up address services and become domiciled in another state where your retirement income and your business income and any income is not going to be subject to state tax if we work it right. A lot of details there, but that's benefit number one. Number two is that this state tax savings is going to add to the fact that you're driving around to do business and you're going to be able to write off the mileage as you drive for business purposes. So if I'm up over in Arizona doing some business and then I've got to go do an RV inspection or travel over to Texas to go to a convention, that mileage to get there is going to be a tax write off. But the con is that I cannot write off the RV as a whole. I can't depreciate it. I cannot take actual expenses. That's not going to work. And it's going to be a major con. And I have to think about maybe even home office. There's a court case that's not favorable where some yahoo tried to write off part of his RV as a home office when he was a full time RVer. You're in such close quarters as a primary residence and that's what you're arguing. Your RV is here. Your home office is not even going to be a write off, typically with an rv, because it's just going to be tough to carve out an exclusive area in your RV for business. Now, again, hitting highlights here, part timers, here's where the RV gets to be a major pro. Because now the RV is a business vehicle and you're going to say some percentage of it is going to be for business use. And that means if I use it 80% for business and 24% for personal, I can write off 80% of the fuel, repairs, maintenance, the interest on the loan to acquire the rv. That becomes a write off. And the big thing is I can depreciate that RV. So I could write off the RV. If it was 100% business use, I could write it off all one shot. Can you believe that in any given year, that's a new benefit too with the 179 deductions of the Tax Cuts and Jobs act where the government taketh away, they also give some benefits. You got to find the spot that's best for you. So as a part time RV owner that RV becomes a really great way to deduct the RV and you're not stuck with mileage, you're actually writing off the rv. Now the con is that we're having still taking care of our primary residence, you may be paying property tax, you're still maybe under a big mortgage and you want to downsize and you just can't talk your spouse into living in an RV full time. So you still got the primary residence. And that's going to be also problem for state taxes because you may not be able to move domicile so you get to write off the rv but I'm still stuck in my state to pay taxes. Or over here I get to move my domicile and save on state taxes and write off my mileage but I don't get to write off the RV and the home office disappears. So again there's pros and cons and what you want to find out is where's the RV fit best for you and your lifestyle? I think RV ownership is awesome. I think it's fun, it's fantastic. And there can be some tax perks if you structure it properly. So keep studying, don't give up. And I've got plenty of other videos to help you learn the details of this and help you expand your business to be better. Live your American dream. Thanks so much for watching and if you found that helpful, please look in the description below. I've got links to my tax and legal library, my QuickBooks training videos, how to start a small business 50, 60, 70 videos, some as long as 30 minutes, explaining more information on tax and legal strategies that will change your life. Also, if you'd like to subscribe to my newsletter or check out my social media links, please click here. There are weekly free tips and strategies and articles that you'll find extremely helpful and I would appreciate it if you'd subscribe to my channel. I've got so many videos here I produce every week on my YouTube channel and I'd love to give you a ping every time I shoot a new video. Thanks so much and keep living the American dream.
