what tax benefits in a second home (vacation)?

Answer 1

A taxpayer can claim real estate taxes and mortgage interest on a second home.

If the second home is rented for fewer than 14 days, the income from the rental is tax-free. If it is rented for more than 14 days, the property is treated as an investment property.

Answer 2

I believe if you rent it out for more than 14 days a year you can claim it as an investment property. Once you have it as an investment property you can begin reducing your AGI (aggregate gross income) by the losses of your investment property.

Losses are essentially: income you earn from rent minus all your expenses on the property. The expenses can be quite significant because you deduct the depreciation of the property which is 1/27.5 of the value of the house. And you can also deduct any HOA and tax you are paying on the property.

I hope that helps.

Answer 3

IRS booklet 527. study it. in case you do no longer quite get it, shop distinctive documents and hire somebody to do the tax return. once you sell, you have 2 themes. make the main of appreciation and make the main of depreciation. Depreciation benefit should be paid back at your common tax fees. make the main of appreciation is taxed at long term fees in case you have owned it extra beneficial than a twelve months. it is actual despite the fact that in case you stopped renting it. the different subject is that if it is going down in value. you are able to no longer take a loss on very own use sources.

Answer 4

You can deduct interest and property taxes for your second home as well as your main home, as itemized expenses if you itemize.