If I Rent Out My Vacation Home, Can I Still Use It Myself? Only for a very limited amount of time each year, if you want the chance to deduct losses on your rental property. To be treated as a business for tax-loss purposes, your use of the property cant exceed 14 days or 10% of the days the unit is rented during the year, whichever is greater. Ten percent may sound like a lot, but really isnt when you figure that a seasonal rental may only be in demand for two or three months each year. For example: Lorraine, who lives in the city, bought a house at the beach as an investment, planning to rent out the house each summer. This year tenants occupied the house during July and August, for a total of 60 days. Lorraine is allowed to vacation at the house herself for a total of 14 days, which is greater than 10% of the total time the house was rented (0.10 x 60). If you violate the 14-day/10% rule, you can still deduct expenses associated with the rental, but only to the extent that you report rental income. The property cant produce a loss that will reduce your tax bill on other income.
Posted on: Mon, 27 Jan 2014 14:50:26 +0000
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