Do you own a vacation home that you bought for some family R&R? Maybe you’re not using the place as much now that the kids have grown up and moved away.
Strategy: Rent out the home this summer. Although it can be a hassle, especially for first-time landlords, the rental income and tax benefits generally outweigh the inconvenience.
For starters, the rental income you receive can offset most or all of the carrying costs. What’s more, you can use rental expenses—repairs, utilities, insurance, depreciation and so on—to reduce the income for tax purposes. Depending on your situation, you might even be able to claim a tax loss.
However, if you’re not careful, you could fall into a tax trap for excessive personal use. That’s why it’s important to firm up plans before the summer rental season begins.
Here’s the whole story: If personal use of the vacation home exceeds the greater of 14 days or 10% of the time the home is rented out,...(register to read more)