Greetings,

I'm back in the swing of things after doing a bit of travelling. Japan was awesome. If you have never been, I highly recommend it. We had a fabulous time and saw a lot of the country.

Here's the tax tip:

==================================================

A vacation home can give you relaxation and some tax breaks

==================================================

If you own or are thinking of acquiring a vacation home, you may be able to enjoy some tax benefits along with some relaxing days.

The IRS rules on vacation homes are complex, but here’s a quick overview. If you rent out the property when you’re not using it, you have to pay attention to the number of days you rent the property, the number of days you personally use the property, and your personal tax situation.

If you rent for 14 days or less, all the rental income is tax-free; you don’t even have to report the income.

If you rent for more than 14 days, all rental income must be reported. Whether you report the income and expenses as a second residence or as rental property depends on the personal use of your vacation home relative to the time the home is rented out. This test is made annually and determines the nature of deductions, loss carryovers, and the tax treatment if you sell the home.

Note, too, that boats and motor homes equipped with sleeping, eating, and bathroom facilities can also qualify as “vacation homes.”

Please call us for details on how to use a vacation home to your best tax advantage.

Till next time,

Linda