An improved economy, a 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 first installment of a two-part series reviews the current tax rules that apply to vacation homes that are rented to others during the year and suggests some planning moves. Click here for Part 1 of this article.
Dean Holland, CPA