If you rent your vacation home for 14 or fewer days during the year and use it personally for more than 14 days, the property falls under the tax rules for personal residences.As explained, you can generally deduct qualified residence interest from your mortgage on Schedule A. You can always deduct the property taxes on Schedule A.
You need not declare one cent of the rental income on your 1040. You can't write off any operating expenses (maintenance, depreciation, etc.) attributable to the rental period, but this is still a great deal. And it can really pay off when your vacation home is fortuitously located near a major event -- like a big golf tournament. You may be able to rent the house for a few days at outrageous rates without having to share any of the profits with Uncle Sam.
You can also take advantage of this break by, for example, renting your vacation home for a short time for filming of movies or commercials. (This 14-days-or-less-tax-free-rental-income rule also applies to principal residences.)
Tax Savings Strategies for Vacation Homes
Last Updated May 2, 2015
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