If you decide to finance the purchase of an RV, you may be able to deduct some or all of the interest payment for the loan on your federal income tax return. Under IRS regulations, you can deduct your home mortgage interest payment on your main home or your second home. They define a home as a house, condominium, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities. To qualify for the interest deduction, the debt must be secured. A secured debt is defined as one in which you sign an instrument (such as a mortgage, deed of trust, or land contract) in which the home is put up as collateral.

Your main home is the home where you ordinarily live most of the time. You could then treat your RV as a second home, as long as it is not rented out during the year. You do not have to use the home during the year to designate it as your second home for tax purposes.

Depending on the amount of the loan, this can be a fairly sizable deduction. The rates of RV loans are not based on home mortgage rates but are more closely tied to the rates you would get on a manufactured home. The interest rate is generally higher and for a period of ten to fifteen years instead of the typical thirty-year note for a site-built home and land.

Remember that, unlike a home, an RV will depreciate in value over the time you own it. Much like a car, it will begin depreciating the minute you take delivery of it from the dealer. In all likelihood, the amount of interest you are able to deduct from income tax will not offset the amount that your RV will depreciate. Don't purchase an RV as an investment; purchase it for the enjoyment it will give you.