Have a second home? Now that school is out and the weather is
nice, many tax payers with a second home will be traveling between the two
properties and spending this season
their favorite locations. If you’re
considering renting your summer home out, there are important tax implications to
consider when deciding how long you’re going to rent your home out during the
You may be required to
pay taxes on any income you earn during the rental period. As a landlord, your tax situation may also
allow you to claim several deductions and lower your taxable income.
If you rent your second
home to others but still uses it as a personal residence may be limited in the
deductions they can obtain. According to
the IRS, a home is considered “a personal residence” if the owner(s) use it for
personal purposes for more than the greater of 14 days or 10% of the time that
it's rented. If the home is rented out
for most of the year, it may be considered a residential rental property.
If your home is
considered a residential rental property, you may be permitted to claim
deductions relating to the maintenance of the property. These write-offs include:
- property management fees
- and more
Current tax rules state
that if you plan to rent your home for 14 or fewer days, you are not required
to pay taxes on rental income. If you
exceed 14 days, tax rules for rental income apply! This advice is about federal
tax rules only. Local and state taxes
may still apply, regardless of the length of time the home was rented.
Be sure to speak with
your Liberty Tax Service professional if you have any additional questions
about your rental property.
Find an office in your neighborhood.