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.
Sign up for Kiplinger’s Free E-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."
-
Four Proposed Changes to Medicare in the One Big Beautiful Bill ActThe One Big Beautiful Bill Act was passed in the House and is now in the hands of the Senate. If passed, it would include big changes to Medicare. Here's what to know.
-
Are Brighter Days Ahead for This Fidelity Health Care Fund?Health care stocks are showing signs of life after a lengthy period of underperformance. That bodes well for the Fidelity Select Health Care Portfolio.
-
How to Search For Foreclosures Near You: Best Websites for ListingsMaking 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 RatesLuxury 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 Airbnbreal estate Here's what you should know before listing your home on Airbnb.
-
Five Ways to Shop for a Low Mortgage RateBecoming 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 Changebuying 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 FundSmart 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 OffersBecoming 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 AreasBecoming a Homeowner What’s happening in the market where you live?
