Tuesday, November 03, 2009

Tax Tip -- Don't Collect Any More $ from Second Home Rental

Here's a tip from Julian Block of CBS MoneyWatch for those who use their second homes to generate extra income through rentals:

Owners are permitted to rent their vacation homes and to bank the rent checks without declaring the rental income in certain circumstances.

First, you must have had a tenant in that second home for fewer than 15 days in order to collect the rent tax-free. If you have rented it for more days, all the rental income becomes taxable. Thus, if you have the option of renting or not renting for the rest of this year, or collecting rents due, and the income is not worth paying taxes on, skip the rentals and money until Jan. 1.

I'm not a tax advisor or accountant, so doublelcheck this info with your tax guru and/or read the IRS’s Publication 527, which has all the details.

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