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Renting your vacation home

Renting out your vacation home can be a great way to earn an extra few dollars each year. But before you do, here's a list of tips and facts you should be aware of.

  1. If your vacation property is "used as a home" and rented less than 15 days per year, you do not have to report the rental income
    1. A property is "used as a home" if you use it for personal use 15 days or more per year OR more than 10% of the total days it is rented to others at fair rental price

 

  1. If your vacation home is rented to others 15 days or more per year you must report rental income and any deductible expenses on Sch E of your individual tax return
    1. Be aware that rental income could be subject to the Net Investment Income Tax

 

  1. If your vacation home is used personally and rented to others, expenses must be divided between the rental use and personal days.  It is important to record the number of days the home was used personally and by others because the number will determine how to split your costs
    1. Any personal use percent for mortgage interest, property taxes, or casualty losses will be deducted on Sch A of you individual tax return

 

  1. Be aware that if the property is "used as a home" deductions are limited to rental income

If you are thinking about renting out your vacation home, make sure to consult with your tax advisor for a full discussion on how this will affect your personal tax situation.

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