Rental Income On Your Second Home Is Tax-Free . . . Sometimes
The goal of owning a vacation home may be to have a place where you
can escape the nuisances and worries of daily life...like traffic,
work and taxes. But vacation-home owners who are counting on tax
deductions to help subsidize summer retreats should take some time
each year to reacquaint themselves with the tax rules governing
vacation homes.
If you rent out your home no more than 14 days a year, you get a
simple break. Any rental income you collect is tax-free � you don�t
even have to report the income. In addition to the tax exemption,
you�ll be eligible to deduct mortgage interest and property taxes on
your second home. But you won�t be eligible for any additional
deductions, such as rental-related expenses like utilities,
maintenance and depreciation.
