However, if you rent the property for only a short time each year, you may not be required to report the rental income.
1.Rental Income and Expenses – Rental income, as well as certain rental expenses that can be deducted, are normally reported on Schedule E, Supplemental Income and Loss.
2.Limitation on Vacation Home Rentals – When you use a vacation home as your residence and also rent it to others, you must divide the expenses between rental use and personal use, and you may not deduct the rental portion of the expenses in excess of the rental income. You are considered to use the property as a residence if your personal use is more than 14 days, or more than 10% of the total days it is rented to others if that figure is greater. For example, if you live in your vacation home for 17 days and rent it 160 days during the year, the property is considered used as a residence and your deductible rental expenses would be limited to the amount of rental income.
3.Special Rule for Limited Rental Use – If you use a vacation home as a residence and rent it for fewer than 15 days per year, you do not have to report any of the rental income. Schedule A, Itemized Deductions, may be used to report regularly deductible personal expenses, such as qualified mortgage interest, property taxes, and casualty losses.
Landlords, rental property owners and real estate owners - Utilize these simple tips when renting your vacation homes and avoids hassles of federal income tax return when reporting.
Landlords, Rental Property Owners, Real Estate Owners – 3 Simple Tips to Know When Renting Vacation Home is brought to you by TReXGlobal.com, maker of the world's easiest Property Management Software.