Here is some information specifically about vacation home rental property:
- Rental income as well as deductible rental expenses need to be reported to the IRS on Schedule E, Supplemental Income and Loss.
- Depending upon your situation, you may be subject to the Net Investment Income Tax as a result of renting your property.
- When you use the home both as a residence and as a rental, you have to divide the expenses accordingly. Count the number of days the property was lived in by you and the number it was rented out and allocate the expenses on a pro-rata basis.
- Any deductible expenses for personal use are reported on Schedule A, Itemized Deductions. These might include mortgage interest, property taxes and casualty losses.
- When using the home as both a residence and a rental, you cannot claim more expenses than the amount of rent you received.
- If you are using the home as a residence and you rent it out 15 days a year or less, the income does not need to be reported. That said, the expenses associated with renting the property for such a short period of time will probably not be able to be deducted.
Give us a call at 916-576-7050 for more information about the specific rules regarding renting vacation homes.