Taxes - AMT Question

[Loc]

I am not a tax accountant and I do not play one of TV, but I was completing my taxes last night and came across a question. I think I know the answer, but thought I would ask the group to see if someone has encountered this. For AMT purposes, does the interest paid on the bus count as eligible mortage interest? This is a separate question from interest qualifying for deductions on your 1040. In reveiwing the instructions for pesky form 6251 (AMT) it would appear that an RV does not fall under the definition of a Qualified Dwelling (...mobile home not used on a transient basis) and therefore interest on the bus does not count as eligible mortgage interest making the AMT higher. I talked to a CPA friend who tended to agree, but said that he has not come across this with his clients.

[dalej]

We put our bus on the depreciables on the our schedule C, so all interest was deducted too, as I recall.

[Gary & Peggy Stevens]

Loc, I just picked up our Taxes for 07 from our accountant yesterday.

The good news is we have enough money coming back to pay for the diesel to at least get us to Sevierville.

I told him we just bought a motorhome, and what could I deduct next year on taxes? He told me all the interest in the note was deductable as a second home, but nothing else was deductable, unless I really wanted to take a chance. NOT GOING TO TAKE A CHANCE !


We are heading East out of Houston @ 1:00 today, Friday. First week in Panama City, then Sunday the 13 leave Atlanta heading North, to Tennessee.

Gary S.

[dalej]

Gary, we are going to have another auction in TN to go toward this poor boy from Huskerland to buy fuel. If you want in on it....take a number.

[Gary & Peggy Stevens]

Dale what have you got to auction off that would bring any money, except maybe Jan of course ?

Gary S.

[dale farley]

My accountant told me that my interest on the bus would be deductible.

[jonnie]

If you guys haven't had any experience with AMT your are not making enough money to get screwed by Uncle Sam. AMT is unamerican and whoever came up with the idea should be hung and all of his children castrated and sold into bondage. Or maybe a week with JDUB on the "Taco Tour" would be the worst punishment imaginable!

Have fun in TN.

[Loc]

Gary - if you register it in Texas be sure to save the receipt for the licensing where you pay for the sales tax. If Congress does what it has done for the last couple of years, the sales tax will also be deductible. It is not a given, but you want to be sure and ask your accountant. The deduction is in addition to the standard chart for state sales tax.

John - it is worse than un-American. A week with the Taco Tour would only start to be punishment. Perhaps full time dump boy status on the Taco Tour with one of those sewer hoses they used in the movie "RV" would start to approach the appropriate level of punishment.

This is not a question of deductibility for Schedule C - that is not in question as interest on the bus is deductible if it is your primary or secondary residence. This is an AMT deductibity question for interest expense on the bus. I see that I am going to have to call the team of tax / accounting / and really bad country boy expressions professionals that are part of JDUB's posse to get the real answer.

[Ray Davis]

If Congress does what it has done for the last couple of years, the sales tax will also be deductible.

Careful on this. I'm right in the middle of fighting an audit right now. In the tax section of Schedule A you can deduct the larger of state income tax, OR state sales tax, whichever is greater. For state sales tax, if you have major purchases, then you can declare those, which add to your sales tax.

So far, first pass in this audit "cr.p", they disallowed the sales tax I paid on my bus in 2005, however they did allow the sales tax paid on another used car I purchased out of state. Difference? One was from a dealer (the car), while the bus was through an individual. In the purchase from the dealer, the contract indicated "sales tax", while with the individual, when I registered with DMV, the 7.75% fee indicated "use tax". Not sure how it's different, it's the same fee.

Anyway, be careful if you try to deduct the sales tax.

Please let me know what you find out about the AMT issue? I'm still finishing this years taxes, and that was one of the sections I hurried through, and I left it so the interest added back into the AMT bottem line. If I can remove that, I'll be happy.

Ray

[Loc]

Ray,

Good point. In Texas, we are lucky that we have no state income tax. Of course they try to make up for it through real property taxes. I am going to talk to another CPA friend this weekend and see if I can get to the bottom of it. As I read it, because the RV is used on a "transient basis", it will not qualify as eligible interest for the AMT calculation. I will let you know if I find out anything.

Loc