Mobile home tax deduction may be small but it can add to your income
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The owners of mobile homes, who pay taxes to local governments, for parking their homes in their cities or state, are also eligible for mobile home tax deduction. This is because the IRS rules define a home as a house, co-op, condominium, mobile home, trailer, or even a houseboat. The limiting condition for any property to qualify as a home is that it should have sleeping, cooking, and toilet facilities. Since mobile homes meet all these conditions they can avail the tax deductions notified by the federal government.
The biggest tax deduction that a mobile home owner can avail is on mortgage interest . Joint tax holders, in fact, can deduct the entire interest amount up to a maximum of $1 million in mortgage liability paid on a first and possibly second house.
You don't have to calculate how much amount you deduct. All that you need to do is to wait for the lender to send Form 1098 at the end of the year. This form will tell you how much interest you have paid on the loan, and the points that are due to you. This becomes your deductible interest.
The second head on which you get deduction is what IRS calls home acquisition debt. This debt is equal to the first or second mortgage used to buy, build, or improve your home.
Home equity debt is another head on which you can avail a deduction. Basically, this is any loan amount in excess of what was spent to purchase, build, or improve your home. Points paid during refinancing are also tax deductible.
Finally, you can deduct any property tax that you paid to a local or state government where you parked your mobile home. These are great tax benefits and every mobile home owner must avail them. There is no point in paying local taxes and forgetting to make use of federal benefits.
Written by: the Editor
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