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Vacation Home Rentals: Relax with These Tax Tips

If you own property you rent to others for vacation, use these pointers to report rental income properly on your individual tax return.

First, a vacation home doesn’t necessarily mean “a house.” The property can include a boat, apartment, condominium, mobile home, or similar possession.

If the property is also “used as a home”—not rented for profit—your deduction for rental expenses can’t exceed the rent you received. For more information on this rule, see IRS Publication 527.

If you use your property for personal and rental purposes, you’re required to divide the expenses by comparing the number of days for each type of use with total days of use. When reporting, keep in mind your personal time may also include use by your family, other property owners, their family members, or anyone who pays less than fair rental price.

See Schedule E, Supplemental Income and Loss, to report rental income and expenses and Schedule A to report deductible expenses such as mortgage interest, property taxes and casualty losses.

If you use your property as a home and rent it fewer than 15 days each year, you’re not required to report the rental income on Schedule E. But you can still deduct qualified expenses up to the amount of income you received.

Still have questions about reporting your rental income or qualifying exemptions? Contact the tax accountant team at Patrick & Robinson CPAs: (904) 396-5400 or Office@CPAsite.com.

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