Home Sweet RV

Home Sweet RV

If you’re a fan of Albert Brooks like I am, you’ve no doubt seen the 1985 movie classic Lost in America in which the protagonists sell all their belongings and purchase a Winnebago where they plan to live out the rest of their post-retirement days traveling the open road and living off their nest egg. The premise of this movie and the surge of RV purchases sparked by Covid got me wondering if it is possible to simply abandon the traditional way of living—owning a home or renting—and simply live in an RV. What challenges or benefits would it offer beyond the obvious adventure factor?

The first thing to know about RV living is that it doesn’t free you from having a physical address entirely. You must have a legal address, and not just a P.O. Box, to open and maintain any brokerage or bank accounts for starters. You will also need a place to vote, register your RV and get your driver’s license. Having all of these in the same state, as well as your doctors and even a library card, helps establish domicile in that state, which can be different than your residence. It’s possible to have many residences in many different states, but you can only have one domicile at a time. And it is domicile that helps establish your tax home, so if you’ve dreamed of leaving California and its high taxes in the dust, you’ll need to do your research carefully to establish domicile in a new state. Importantly, you must also actually spend time in your new state of domicile, or the long tax arm of California will no doubt come for you. As you might imagine, the low-income tax states of Florida, South Dakota and Texas are the most popular for full-time RVers. 

Perhaps the most surprising benefit of RV living is that you can claim a homeowner’s exemption for your home on wheels if you have a secured loan on the property and it meets certain criteria. Just like a traditional home, the RV must have sleeping, cooking and toilet facilities in order to claim it as your primary or secondary residence for tax purposes and take a mortgage interest deduction. The other conditions, such as itemizing your deductions on your tax return and debt under $750,000 for a full deduction, still apply just as they do for a traditional home. 

As with any big life decision that will affect your portfolio and your taxes, it is ideal to talk with your financial and tax advisor before making the leap from traditional residence to RV. There just may be a detail that you’ve not considered, and your team can help you think through the decision and make a plan if an un-tethered existence is your dream retirement scenario.

Articles and Commentary

Information provided in written articles are for informational purposes only and should not be considered investment advice. There is a risk of loss from investments in securities, including the risk of loss of principal. The information contained herein reflects Sand Hill Global Advisors' (“SHGA”) views as of the date of publication. Such views are subject to change at any time without notice due to changes in market or economic conditions and may not necessarily come to pass. SHGA does not provide tax or legal advice. To the extent that any material herein concerns tax or legal matters, such information is not intended to be solely relied upon nor used for the purpose of making tax and/or legal decisions without first seeking independent advice from a tax and/or legal professional. SHGA has obtained the information provided herein from various third party sources believed to be reliable but such information is not guaranteed. Certain links in this site connect to other websites maintained by third parties over whom SHGA has no control. SHGA makes no representations as to the accuracy or any other aspect of information contained in other Web Sites. Any forward looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. SHGA is not responsible for the consequences of any decisions or actions taken as a result of information provided in this presentation and does not warrant or guarantee the accuracy or completeness of this information. No part of this material may be (i) copied, photocopied, or duplicated in any form, by any means, or (ii) redistributed without the prior written consent of SHGA.


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