Tax-Free Income
Vacation Homes Offer Tax-Free Income and a Business Deduction. Did you know the Internal Revenue Code allows for you to earn tax-free rental income on your vacation home? The general rule is that if you rent your property for 14 days or less per calendar year, then the expenses that are not otherwise deductible are considered personal non-deductible expenses. So you can’t take a deduction for utilities, insurance, or maintenance. What is great about the general rule is that the rental income earned for the 14 days or less is Tax-Free!! So the requirement is that you not rent out your vacation home for more than 14 days in a calendar year. As long as you follow this rule, the IRS doesn’t even want to know about it!! A couple of other…