Vacation
Home Rentals
If you rent a home to others, you usually must report the rental income on
your tax return. But you may not have to report the income if the rental period
is short and you also use the property as your home. In most cases, you can
deduct the costs of renting your property. However, your deduction may be
limited if you also use the property as your home. Here is some basic tax
information that you should know if you rent out a vacation home:- Vacation Home. A vacation home
can be a house, apartment, condominium, mobile home, boat or similar
property.
- Schedule E. You usually
report rental income and rental expenses on Schedule
E, Supplemental Income and Loss. Your rental income may also be
subject to Net
Investment Income Tax.
- Used as a Home. If the property
is “used as a home,” your rental expense deduction is limited. This means
your deduction for rental expenses can’t be more than the rent you
received. For more about these rules, see Publication
527, Residential Rental Property (Including Rental of Vacation Homes).
- Divide Expenses. If you personally
use your property and also rent it to others, special rules apply. You
must divide your expenses between the rental use and the personal use. To
figure how to divide your costs, you must compare the number of days for
each type of use with the total days of use.
- Personal Use. Personal use may
include use by your family. It may also include use by any other property
owners or their family. Use by anyone who pays less than a fair rental
price is also personal use.
- Schedule A. Report deductible
expenses for personal use on Schedule
A, Itemized Deductions. These may include costs such as mortgage
interest, property taxes and casualty losses.
- Rented Less than 15
Days.
If the property is “used as a home” and you rent it out fewer than 15 days
per year, you do not have to report the rental income.
- Use IRS Free File. If you still need
to file your 2013 tax return, you can use IRS
Free File to make filing easier. Free File is available until Oct. 15.
If you make $58,000 or less, you can use brand-name tax software. If you
earn more, you can use Free File Fillable Forms, an electronic version of
IRS paper forms. Free File is available only through the IRS.gov website.
Additional IRS Resources:
- Tax
Topic 415 - Renting Residential and Vacation Property
- Rental
Income and Expenses - Real Estate Tax Tips
IRS Podcasts:
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