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Mortgage Interest On Your Motor Home or Boat May Be Tax Deductible

A home is defined by the IRS as “a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.”

This means the interest you pay on a loan to acquire a motor home or boat that meets the criteria above may be tax deductible.

http://moneyover55.about.com/od/taxtips/a/mortgageinterest.htm

Troy says

Mortgage Interest On Your Motor Home or Boat May Be Tax Deductible
A home is defined by the IRS as “a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.”
This means the interest you pay on a loan to acquire a motor home or boat that meets the criteria above may be tax deductible.
http://moneyover55.about.com/od/taxtips/a/mortgageinterest.htm

I understand that - but it's still cheaper in the long run to just pay in cash than to carry a mortgage.

Guess you could argue all the variables such as interest rates, inflation etc... but those are all unknowns. To me, it's not worth stressing over. If you can't pay for it upfront, in full, you can't afford it.... either that, or you haven't saved enough.

@Troy

If his plan is to travel around the the Americas, and not necessarily living in the US, it might be cheaper to offshore his money and setup residency in say Costa Rica. At which point you've got around an 80K allowance per year of tax free income.

shrekgrinch - you do realize you could have consolidated all 6 of your posts down to 1 post right?

Where are you taking lessons?
For those of you you who didn't marry as well as the duck, I recommend the Cal Sailing Club. It's a co-op that costs just $75 for 3 months. An easy (and cheap) way to get up to speed before shelling out the cash for 30 foot boats. They have an intensive one week course that allows you to quickly get out on the water without supervision.

there is a very good looking bay-ready vessel for sale in Merced. A cabin cruiser type that is on a 3 axle trailer (tag style I think - not 5th wheel)) and is sized for delta / bay type use. Not a lake boat. I'd say it was a good 20' long, 10' wide and at least 15 feet from bottom to top. A big boat. The window has $14K wrote on it in grease marker. I bet a guy with $12K and a one-ton truck could take it away.
If you want more ifo, just ask. Patrick can email me. If you buy it, a $100 finders fee should be donated to Patrick.Net by you.

EBGuy says

Where are you taking lessons?

For those of you you who didn’t marry as well as the duck, I recommend the Cal Sailing Club. It’s a co-op that costs just $75 for 3 months. An easy (and cheap) way to get up to speed before shelling out the cash for 30 foot boats. They have an intensive one week course that allows you to quickly get out on the water without supervision.

I'll look into that - thanks for the heads up.

Bap33 says

there is a very good looking bay-ready vessel for sale in Merced. A cabin cruiser type that is on a 3 axle trailer (tag style I think - not 5th wheel)) and is sized for delta / bay type use. Not a lake boat. I’d say it was a good 20′ long, 10′ wide and at least 15 feet from bottom to top. A big boat. The window has $14K wrote on it in grease marker. I bet a guy with $12K and a one-ton truck could take it away.

If you want more ifo, just ask. Patrick can email me. If you buy it, a $100 finders fee should be donated to Patrick.Net by you.

It's gotta have sails. I want the gas bill as little as possible.

joshuatrio says

It’s gotta have sails. I want the gas bill as little as possible.

LOL, even as a landlubber I know power-cruising burns 1-2 MPG. Trying to make the 2000+ mile passage to Hawaii is difficult on a cruiser!

This is why I'm waiting for a better power loop.

Plus I want a submersible too, so I can park at a nice anchorage and not be hassled by anyone.

pkennedy says

At which point you’ve got around an 80K allowance per year of tax free income.

Actually it's 91,500 for 2010. Which would bring up the point that if joshuatrio is going to have income while sailing around the America's it would be smart to set up a foreign residency as a base of operations first to be able to take advantage of this.

Troy says

LOL, even as a landlubber I know power-cruising burns 1-2 MPG. Trying to make the 2000+ mile passage to Hawaii is difficult on a cruiser!
This is why I’m waiting for a better power loop.
Plus I want a submersible too, so I can park at a nice anchorage and not be hassled by anyone.

Lol - I don't know about MPG, but I believe it's GPH (gallons per hour) when referring to boats :) I know a decent size cruiser burns around 20-30 + GPH and I may be being conservative... I wonder sometimes how people afford the gas in some of these monsters... Either way, if you plan on sailing and are in no rush, you can avoid most of the fuel bill.

bob2356 says

pkennedy says

At which point you’ve got around an 80K allowance per year of tax free income.

Actually it’s 91,500 for 2010. Which would bring up the point that if joshuatrio is going to have income while sailing around the America’s it would be smart to set up a foreign residency as a base of operations first to be able to take advantage of this.

No, I don't plan on having income when we decide to take our "trip". We'll be living straight off of savings. I may do side/contract work if I really need money, but I really think we'll be ok. We're not rich by any means, but we're probably one of the most conservative couple you'd ever meet - we budget every item, have no debt, my wife coupons galore ... if we don't have the cash, or if it's not in the budget, we don't get it. Period.

Getting off track - sorry - (actually I've hijacked the thread.. lol) ... I don't care about tax shelters, making a lot of cash, nor do I want to worry about investments. I don't have a 401k plan or retirement, my children's college fund is in PM's and the rest is cash. I don't believe in the stock market, or any of those interest earning funds (IRA's, CD's) etc... My parents can't stand that I don't invest like they do - they think I'm foolish (and I may very well be), but almost every member in my family is upside by almost 100k on real estate they bought in the past 2 years. I'm the only renter. lol. I'm also the only member in my family without a car payment :)

If we asked everyone how much money they'd need to be happy, the answer would always be "not enough." If you said a million bucks, and I gave you a million bucks - give it a month or two and that wouldn't seem like a lot anymore.

Not really sure where I'm going with this so i'll stop here :)

Hey guys, hate to resurrect this thread that got way off topic, but I'm new and can't make new threads.

Please see my post here: http://patrick.net/?p=237330

I ask the question: Were 100% of past sales at this brand new condo FHA financed? Can we get a definitive answer? If true, that would be ridiculous and this condo can become a poster-child for all that is wrong with FHA.

E-man says

However, we don’t think on the same frequency when it comes to planning. I believe RE is one of the easiest way to achieve financial indepence. Before I buy anything (such as a sail boat), I would find some investment or someone to pay for it. It’s kind of like someone is paying off the mortgages on my RE investments. Why don’t you find some investment that would pay off your sail boat instead of taking the money from your savings account? Just a suggestion.

Getting there. We don't have it all planned out yet. First things first and that's to see if we like sailing and the lifestyle - financially, we'll be fine.. I'm not totally against RE - I'm just tired of monitoring values for the past several years that a break from it would probably be good. Not looking to make the transition for at least 2 years which allows plenty of time to plan and get it all figured out. We may purchase a couple rentals on the East Coast (where family is) that could potentially pay for the whole trip, or we may not.

E-man says

Just out of curiosity, was there a reason why you chose to invest in Rio Grande valley over the triangle Houston/San Antonio/Dallas?

Because I lived there at the time. I only buy RE in places I've lived and know the area. I only bought property once without living in an area for at least a year. Like getting my dick caught in the zipper, it's something I'll never do again. I've sold my properties in other parts of the country (PA,NY,OR) to concentrate in the RGV because property management wasn't nearly as good in those area's as the RGV. A very big factor if you are going to live 12,000 miles away. At present the rental numbers run nicely and I can get a sub 4% 15 year fixed so I'm looking for a couple more houses in the next year or two. RE laws are also much, much more landlord friendly in Tx than many other places.

I work (sort of, I've scaled back a lot, free time matters more now) over the internet (as in send me specs, I'll send back code), so I could work from mars. Pre internet I used to work all over the country and overseas. My wife now has the job that requires a physical location so we continue to roam the planet. I like it. So few Americans live and work overseas it's shocking. Most of the rest of the world is amazingly mobile. It's really hard to imagine how insular the US is until you try do anything with US businesses or US government institutions using overseas information. Things I could do with no problem using a NZ drivers license in places like New Guinea or Tahiti or Costa Rica are a nightmare to do in New Jersey or Oregon.

chubbuni138016 says

I went to school grades 4-12 in La Canada and as you stated, the schools are fantastic. Although the school district is top notch, you are going to be paying at least a 200-300k premium over Glendale, Burbank or any of the other surrounding bedroom communities. Unless you have a bunch of kids going to private school, or are going to send them K-12, I don’t know if your math applies, Mark_LA.
Don’t get me wrong: I would love to give my kids the education that I was provided by my folks… I just don’t think I can pull in $400k a year like they did for the privilege of living in LC.

As long as I don't buy in La Canada during the peak of the bubble, my math makes sense. A good private school will cost $20k-$25k per year...Let's take the higher # to partially account for future inflation... so $25k x 13 years = $325,000 to put 1 kid through private school. I have 1 daughter, and 1 on the way, so for 2 kids it'll be a minimum of $650,000 to put them in a good private school for 13 years...more than likely close to $1 million when you take future tuition increases into account, which are always higher than inflation.

Let's say I buy a home in La Canada instead right before they start Kinder for $1 million (very average home, nothing spectacular for this expensive area--I don't care...I'm buying the home for the school district, I know I can buy a mansion on a golf course for that price just 40 miles east in the Inland Empire).

When they start college, I can always sell it back for at least $1 million, more likely $2 million, since I won't be buying right now that prices are still inflated, and prices will at the very least rise with inflation from 2013 to 2026.

So, even if home prices don't appreciate one cent from 2013 to 2026, I will have saved $650,000 in private school tuition. If home prices appreciate from 2013 to 2026, then it's all just more icing on the cake. More than likely, someone in 2026 will do the math and figure out that they're better off buying my average home in La Canada for $2 million than paying $50k per year for private school tuition for the next 13 years for their 2 kids.

When my kids start college I just sell my house and move to a less expensive area with a bad school district priced in (maybe Pasadena's wonderful Linda Vista area just west of the Rose Bowl--great neighborhood, nicer than most of La Canada--but Pasadena has horrible schools) and my math will make a lot of sense.

Some good ones in this thread. Bad credit =?= Good renters? Gimme a break. Get out now if you still can if you don't know what i mean on this one.

BTW, FHA keeps poor people from owning homes. poor people == bad credit == NO FHA. maybe FHA works for some college students and some tax evaders who work under the table; but, not for the working poor by a long shot.

When we bought in march we were amazed to see a sneaky fees. Looks like mortgage companies are sneaking in just under 1% as a mortgage-company version of the PMI (Mortgage Company Insurance, MCI?) So, now are we seeing PMI, MIP, and MCI? You add a couple thou onto the closing costs and it starts to get out of reach (less sensible than continuing to rent).

BTW, I see lots of RE bulls on this thread. Surprising given the continued deterioration. But, hey, the next bailout may be just around the corner....

maxweber1 says

BTW, FHA keeps poor people from owning homes. poor people == bad credit == NO FHA. maybe FHA works for some college students and some tax evaders who work under the table; but, not for the working poor by a long shot.

Actually, FHA does not work at all for people who can't document their income. Your ability to qualify is entirely dependent on how much income can be shown. It's really good for people who currently make a lot but can't manage their money and are incapable of saving. And the minimum FICO score needed is pretty freaking low, isn't it?

thunderlips11 says

Holy crap, I’ve been looking in Miami. It’s a disaster zone. $100k Condos built 3 years ago that had a $300k target by the developer… 8+ story high rises where 50% of units short sales, foreclosures and bank repo from developers.

gameisrigged says

maxweber1 says

BTW, FHA keeps poor people from owning homes. poor people == bad credit == NO FHA. maybe FHA works for some college students and some tax evaders who work under the table; but, not for the working poor by a long shot.

Actually, FHA does not work at all for people who can’t document their income. Your ability to qualify is entirely dependent on how much income can be shown. It’s really good for people who currently make a lot but can’t manage their money and are incapable of saving. And the minimum FICO score needed is pretty freaking low, isn’t it?

Maybe. Maybe not. If the person doesn't pay a bill such as a $10K medical bill then they can't get it. Unfo. that is the norm for the working poor in the USA. Met lots of these folks in the neighborhood. Its sad. But I guess somebody has to live on minimum wage or thereabouts. I know I couldn't.

Looks like FL is not at all done with price adjustment. I think that's true nationwide actually. The USA has an enormous amount of open land. If land hoarding laws are ever enacted then prices will adjust much closer to 3x salaries.

Housing market prices are down since October, but how much of this is becase of the change in FHA rules and how much is just because of the ongoing trend since late 2006.

maxweber1 says

gameisrigged says

maxweber1 says

BTW, FHA keeps poor people from owning homes. poor people == bad credit == NO FHA. maybe FHA works for some college students and some tax evaders who work under the table; but, not for the working poor by a long shot.

Actually, FHA does not work at all for people who can’t document their income. Your ability to qualify is entirely dependent on how much income can be shown. It’s really good for people who currently make a lot but can’t manage their money and are incapable of saving. And the minimum FICO score needed is pretty freaking low, isn’t it?

Maybe. Maybe not. If the person doesn’t pay a bill such as a $10K medical bill then they can’t get it. Unfo. that is the norm for the working poor in the USA. Met lots of these folks in the neighborhood. Its sad. But I guess somebody has to live on minimum wage or thereabouts. I know I couldn’t.
Looks like FL is not at all done with price adjustment. I think that’s true nationwide actually. The USA has an enormous amount of open land. If land hoarding laws are ever enacted then prices will adjust much closer to 3x salaries.

Your "maybe, maybe not" is in reference to what?

gameisrigged says

Your “maybe, maybe not” is in reference to what?

In reference to:

And the minimum FICO score needed is pretty freaking low, isn’t it?

Its low if you have a good job and such but not low if you're poor. If you're poor, the FICO required is way too high and it was like spitting in their face when I mentioned the FHA programs to more than one potential poor buyer. But I think their was a FICO-holiday a few years ago where FHA let anyone get a loan. Not sure. none of the poor I talked to seemed to know about that one.

BTW, by "tax evaders" I was talking about the classic chinese restaurant or the offshore account worker. When I was in LA seemed like every other person had some tax avoidance/evasion scheme going. So, they really can buy the house but their paperwork says they can get FHA. Sorta like a bank with a trillion is assets getting money at 0.25%. :-)

I think the bigger problem is that FHA still exists pushing prices up and making housing unaffordable without a government hand out in the poor areas.

I strongly believe that if FHA were to be phased out, housing in these areas would calm down to a point an average person can purchase without needing FHA.

Chris, it probably is a local issue--probably micro-local, as it were: to the point it's a matter of close to work, quality of life, etc. We rent in Hancock Park and I can tell you it has gotten no cheaper. Mostly because there is lower turnover in this kind of area, and it is pretty central to everything as far as LA goes. We've been at $2100/mo for 3 years now, which seems to still be the going rate if you can find anything in our category, and the listing prices are still easily $850k+.

Boo Hoo! My 2br 800 sqft shit hole should worth $1,000,000 why is the Government and FHA trying to screw me over?

Somebody call the Goddamn Wambulance geesh!

Where were the damn prudent measures from '97-'07?
Which btw, by most practical economist housing is headed 97-99 prices. There has been no REAL growth in the last decade.

And now Greenspan cleared his throat today and stated what anyone with a wallet should have figured out in '07. That the government should have let the whole meltdown play out on its own. In fact ALL of the stimulus measures, every single dime of it, was a hindrance to the recovery.

One should have a $1,700 mortgage for every 120,000 their house is worth. Like it's been OH lets see...
FOREVER!

Yeah, I still don't understand the rents are rising thing.....

I was looking for a new place in downtown LA from August-October last year and rents were significantly below what they were 3-4 years ago. I wound up finding a place for $1575/mo that had been renting for $1900 a month in 2006.

That bore out where ever I looked, though not in such drastic fashion. I also found out that as a steadily employed person with good credit and a substantial checking and savings account, that asking rent prices where absolutely meaningless. Every single landlord was willing to come down on their asking price and several actually said "I wish there were more tennants like you".

I realize what the statistics show. I disagree with them and believe my real life experience contradicts what the stats show.

I'll also note that like others, renting is WAY cheaper than buying. An equivalent property sold about 8 months ago at $340K. Add in some of the freebies I get, and $660/mo HOA's, and it would cost $2800mo to buy that property plus the 20% downpayment amount.