Vacation home: How is your tax bill affected if you rent it out?
If you own a vacation home, you may want to rent it out for part of the year. The tax treatment can be complex. It depends on how many days it’s rented and your level of personal use. Personal use includes vacation use by you, certain relatives and nonrelatives if market rent isn’t charged. However, if you rent the property out for less than 15 days during the year, it’s not treated as “rental property” at all. This can produce revenue and significant tax benefits. Any rent you receive isn’t included in your income for tax purposes. However, you can only deduct property taxes and mortgage interest (no other operating costs or depreciation). Contact us to help plan for the best tax results.