Motorhome Load Interest Deduction

by Barry
(Crossville, TN)

We own a home and a motorhome (second home) and have ben declaring the loan interest on both in the past. We have now decided to turn the motorhome over to a Rental Agency and will share the rental income with the agency and we are responsible for the maintenance, etc.

It is my understanding that since we have no input to the business, we will only have to show the income minus expense on our Form 1040 and cannot show a loss; however, the loss can be carried over to the future years. We will be using a 5-yr straight-line depreciation model to declare that expense.

My question is: Are we still able to deduct the loan interest paid on the motorhome loan or do we loose that deduction when we turned the motorhome over to the rental agency. At that point, we still own it, we're still paying the loan monthly, but it is no longer our second home. Although, we will be staying in it for a couple of weeks this winter.

Thanks for your help.