23 Feb Can I deduct motor home loan interest?

Q. I own a motor home on which there is a loan. For family trips, the motor home is our home away from home. I do not rent it to others. For 2017, the loan interest is a tax deduction. Will that no longer be true for 2018?
— Traveling man

A. You’re correct that there were changes in the new tax law related to these deductions.

The deduction for interest on home equity loans and lines of credit of up to $100,000 ($50,000 if married filing separately) has been eliminated unless the funds are used for capital improvements, said Neil Becourtney, a certified public accountant and tax partner with CohnReznick in Eatontown.

Also, interest can only be deducted on $750,000 of acquisition indebtedness incurred on or after Dec. 15, 2017, or $375,000 if married filing separately, he said.

Loans acquired before Dec. 15, 2017 are grandfathered in at $1 million, or $500,000 if married filing separately, he said.

“The House proposal would have eliminated the ability to deduct mortgage interest on a second residence, but that did not get enacted,” he said.

Mobile homes, house trailers and boats are considered a qualified residence when it comes to deducting mortgage interest, he said.

“If you were able to deduct all of your mortgage interest for 2017 then aside from any home equity indebtedness, you will continue to be able to deduct all of your mortgage interest for 2018,” Becourtney said. “With the increases in the standard deduction — $24,000 for a joint filer — it is conceivable that you will come out better claiming the standard deduction versus claiming your actual itemized deductions.”

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This post was first published in February 2018.