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Motorhome principal residence


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Participant is requesting a hardship distribution for purchase of an RV that will be used as participant's principal residence.  Plan document allows for hardship distributions for safe harbor purposes.  I see no issue with allowing the hardship distribution.  Recordkeeper is asserting that the IRS requires that a principal residence be a "fixed" dwelling and that they have unequivocally indicated that a motorhome is not considered a principal residence.  The recordkeeper offers no documentation just their assertion.

Has the IRS indicated that an RV cannot serve as a principal residence? 

 

Thank you for any guidance.         

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I've not heard of any requirement that the dwelling be fixed.  For years, we've allowed hardships for the purchase of a boat as the principle residence.  It must have a roof, a bedroom, and a bathroom.  Also, wouldn't probably fly on the shores of Lake Superior, but other place - sure.  Certainly not fixed...

I can only imagine that with remote work, work from anywhere, and with pretty good portable internet, this is going to become more popular (apart from fuel costs).

My boss has one, and she has been known to work on the road.....

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When a recordkeeper's customer-service person does not cite an authority, my experience suggests there is none.

And even if there might be some Internal Revenue Service notice or announcement (or even a Revenue Ruling), only the Treasury department's rule binds a taxpayer. 

 

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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Not the first time for this question:

 

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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How else to you prove your primary residence, utilities, mailing address, voter registration, driver's license(!!), etc.  Might be after-the-fact if they're downsizing, but its all the same otherwise.  Snowbirds aren't all condo owners in the off-season, plenty of them just move their "home" from campground to campground. 

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It's a facts and circumstances question for the participant - if the RV is their principal residence, then so be it.  Although RVs are not mentioned specifically, this excerpt from IRS Pub 523 (Publication 523 (2021), Selling Your Home | Internal Revenue Service (irs.gov)) may be helpful:

Sale of your main home.

 You may take the exclusion, whether maximum or partial, only on the sale of a home that is your principal residence, meaning your main home. An individual has only one main home at a time. If you own and live in just one home, then that property is your main home. If you own or live in more than one home, then you must apply a "facts and circumstances" test to determine which property is your main home. While the most important factor is where you spend the most time, other factors are relevant as well. They are listed below. The more of these factors that are true of a home, the more likely that it is your main home.

  • The address listed on your:

    1. U.S. Postal Service address,

    2. Voter Registration Card,

    3. Federal and state tax returns, and

    4. Driver's license or car registration.

  • The home is near:

    1. Where you work,

    2. Where you bank,

    3. The residence of one or more family members, and

    4. Recreational clubs or religious organizations of which you are a member.

Finally, the exclusion can apply to many different types of housing facilities. A single-family home, a condominium, a cooperative apartment, a mobile home, and a houseboat each may be a main home and therefore qualify for the exclusion.

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