Agent

Vacation home not exempt from real estate taxes

Length of rental period a key determinant
Published on Jan 19, 2006

DEAR BOB: I own a beach condo, which I rented out last summer through a rental agency. This summer I want to use it as my second home, but periodically allow family and close friends to use it at a reduced rental rate to help with expenses. Am I required to pay tax on that rental income? --Alice H. DEAR ALICE: If you rented your beach condo for more than 14 days in 2005, you are required to report that rental income and deduct applicable expenses on Schedule E of your 2005 income tax returns. However, if the rental days were less than 14, you can keep the rent money and Uncle Sam doesn't care. Purchase Bob Bruss reports online. The same rule applies in the summer of 2006 when you plan to spend more personal time enjoying your beach condo. If you rent it for more than 14 days, the rental income must be reported on Schedule E of your tax returns where you can also deduct applicable expenses, such as part of your mortgage interest, property tax, insurance, utilities, repairs, and other op...

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