When You Make Your Vacation Home a Business
The IRS considers your vacation home a business if your personal use does not exceed 14 days per year or 10% of the number of days the property is rented out at fair market value, whichever is longer.

The IRS considers your vacation home a business if your personal use does not exceed 14 days per year or 10% of the number of days the property is rented out at fair market value, whichever is longer. If your home qualifies as a business, you:
Must report all of your rents as income.
May deduct expenses attributable to the rental business, including mortgage interest, property taxes, utilities, repairs, advertising, insurance, property-management fees, and auto and other travel expenses.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
May depreciate the cost of the building over 27.5 years and the cost of appliances, carpets and furniture used in the rental property over shorter periods.
May deduct mortgage interest and property taxes attributable to personal use of the property.
May deduct, subject to income limitations, up to $25,000 in losses per year against other income, such as wages, if you actively participate in the management of the property. Active participation is defined as approving new tenants, deciding on rental terms, or approving capital improvements or repairs. The special loss allowance phases out when the taxpayer's adjusted gross income reaches $100,000 and disappears when it tops $150,000.
May defer capital-gains taxes when selling your vacation home by swapping it for another rental property through a "1031 exchange."
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Kosnett is the editor of Kiplinger Investing for Income and writes the "Cash in Hand" column for Kiplinger Personal Finance. He is an income-investing expert who covers bonds, real estate investment trusts, oil and gas income deals, dividend stocks and anything else that pays interest and dividends. He joined Kiplinger in 1981 after six years in newspapers, including the Baltimore Sun. He is a 1976 journalism graduate from the Medill School at Northwestern University and completed an executive program at the Carnegie-Mellon University business school in 1978.
-
The Most Tax-Friendly States for Investing in 2025 (Hint: There Are Two)
State Taxes Living in one of these places could lower your 2025 investment taxes — especially if you invest in real estate.
-
Want To Retire at 55? See If You Can Answer These Five Questions
Who said you can’t retire at 55? If you say yes to these questions, you may be on your way to an early retirement.
-
How to Search For Foreclosures Near You: Best Websites for Listings
Making Your Money Last Searching for a foreclosed home? These top-rated foreclosure websites — including free, paid and government options — can help you find listings near you.
-
Luxury Home Prices Rise as the Rich Dodge High Mortgage Rates
Luxury home prices rose 9% to the highest third-quarter level on record, Redfin reports, growing nearly three times faster than non-luxury prices.
-
Four Tips for Renting Out Your Home on Airbnb
real estate Here's what you should know before listing your home on Airbnb.
-
Five Ways to Shop for a Low Mortgage Rate
Becoming a Homeowner Mortgage rates are high this year, but you can still find an affordable loan with these tips.
-
Looking to Relocate? Plan for Climate Change
buying a home Extreme weather events are on the rise. If you’re moving, make sure your new home is protected from climate change disasters.
-
Retirees, A Healthy Condo Has a Flush Reserve Fund
Smart Buying Reserve funds for a third of homeowner and condo associations have insufficient cash, experts say. Here are some cautionary steps you should take.
-
Cash Home Buyers: New Services Offer Help Making All-Cash Offers
Becoming a Homeowner Some firms help home buyers make all-cash offers on homes. Weigh the fees before you sign on.
-
Home Sale Prices in the 50 Largest Metro Areas
Becoming a Homeowner What’s happening in the market where you live?