Whether you generate income by renting your vacation home, or simply use it for your own pleasure, there are significant tax benefits:
- Tax and interest deductions. You can generally deduct the real estate taxes and mortgage interest, just like you do for your primary residence.
- Rental Deductions. If you use the property as a rental, you can also deduct a portion of your insurance payments, utility expenses, repair costs, the fees charged by service providers, plus the lost value due to general wear-and-tear.
- Renal Income. If you rent the property out only occasionally (fewer than 14 days a year), you most likely won't have to pay taxes on the income.
- Sale Profits. If you live in the property full-time for at least 2 years before selling it, you may not have to pay taxes on the sales profit ($500,000 limit for couples; $250,000 limit for singles).
January 2016 - Copyright 2015 Windermere Services Company. All Rights Reserved.
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