There is no denying the fact that the tax rules on rental income from your vacation homes or second homes can be quite complicated especially when you rent your home for several months and also use the home yourself.
As a homeowner, if you rent your property or home for 2 weeks or fewer days in a year, you can make the rental income tax free. This happens if your home is close to a vacation destination. You can make some extra money by renting your principal residence for 2 weeks or less. A tax accountant in Culver City can help you to make you understand how you can earn some more money without paying extra tax.
The rental income of your holiday home for 2 weeks or more must be included on your tax return file on Schedule E, Supplemental Income and Loss. Also, your rental income might be subject to the net investment income tax. An accountant Culver City makes you understand about tax rules for vacation homes.
Tax rules for vacation homes:
If you have a holiday home that you mostly use for personal use but sometimes give it on rent for up to 14 days in a year, you don’t have to pay anything as taxes for rental income. In case of rental income for up to 14 days or less, some expenses are deductible. However, you may have to pay for the personal use of the home limits deductions.
What rental home expenses are tax deductible?
There are a number of rental home expenses that are tax deductible. An efficient accountant Culver City will help you to make the list of the expenses that are tax deductible. In order to get the deductions, you have to save the receipts and other documentation.
Below are discussed the expenses list, for which you can claim the deductions –
• Cleaning and maintenance
• Insurance premiums
• Legal fees
• Commissions paid to rental agents
• Condo or homeowner association dues
• Mortgage interest
• Legal fees
What is considered as the rental homes or vacation homes by the IRS?
The IRS considers your mobile homes, condos, and boats as the vacation homes. Remember, if you have a houseboat or trailer with the facilities of sleeping, cooking and a bathroom, it might also be considered as a rental home or vacation home.
Facing problems with how to earn from your vacation home without giving extra tax? Want to learn more about tax rules for rental homes? Then, count on us today. Our expert accountants in Culver City can guide you to earn some extra money even from your permanent residence when you are on a vacation.