An improved economy, strengthened real estate market in many areas, and a favorable interest rate environment has led to a resurgence of interest in vacation or second homes. These properties offer a chance to provide the family with a place to rest and relax at a reduced cost when compared to expensive short-term resort rentals, and at the same time give owners a shot at capital appreciation over the long term. They also offer a chance to earn some rental income when the owner or family members aren’t using the property. This second installment of a two-part article about current tax rules that apply when taxpayers dispose of (by selling or exchanging) vacation homes along with some suggested planning moves. Click here for Part 2 of this article.
Dean Holland, CPA