It’s the time of year for weddings in faraway churches and family reunions in relaxing places. Perhaps friends (or friends of friends) have approached you about renting your home, or vacation cabin, when you are not using it this year. And, they are willing to pay — an amount in line with the best rental properties in the area.
Do you have to declare the income to the Internal Revenue Service on your annual income tax return? How much is too much before crossing into a different tax threshold?
While many families don’t charge a fee for letting friends use their home or getaway retreat for a special gathering (hoping they’ll return the favor when your daughter gets married), you can pocket any fair-market rent as long as the term is 15 days or fewer and you don’t claim any of the tax deductions typically allowed on rental property, such as for depreciation or maintenance.
This option can come in handy for folks who do not want to be in the rental game, yet occasionally find they could rent their place. It happens all the time for annual golf tournaments, arts fairs, theater festivals, auto races and jazz carnivals.