Your Vacation Home and Taxes

November 13, 2012
Luxury Vacation Homes
 
Renting out your vacation home can be a great source of income as well as income tax deductions, but you must be careful. If you receive the income, you can deduct certain expenses which may include interest, taxes, casualty losses, maintenance, utilities, insurance and depreciation. If you rent to make money and don’t use the house as your main residence, your deductible rental expenses can be more than your gross rental income. 
 
If you live in the house more than fourteen days of the year or more than 10% of the total days you’ve rented it to others, the IRS considers the house to be your main home as well, though.     If you don’t rent it 300 days a year and live in it the other 30 days, your vacation home is your main home as well. However, if you have rented it during those 300 days and you’ve spent more than two weeks there, it   qualifies. The key is to have rented it at least those 300 days, which is what will qualify it to be deductible.
 
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