A vacation home can be a valuable source of rental income as well as a place where the family can relax and unwind. From a tax perspective, you can deduct your expenses related to the rental activity—including property taxes, mortgage interest repairs, insurance, etc.—to offset the rental income. You may even be able to claim an overall tax loss for the year.
However, you can’t claim a tax loss if your personal use exceeds the greater of 14 days or 10% of the days the home is rented out. In that case, your deductions are limited to the amount of your rental income.
Strategy: Take a winter break straddling this year and next year. For instance, if you already vacationed at the home for one week during the summer, you can stay there the last week in December plus a few more days in January without exceeding the personal-use limit for 2009.