Q. Troy, We're Not Ready to Sell Our House Just Yet. Is There Any Way We Can Take Advantage of This Hot Real Estate Market Anyway?
Just like residential real estate on the Seacoast, there’s a lack of inventory when it comes to vacation rentals. But there’s an upside to this for many locals! According to the IRS, if you rent out your residence for 14 days or less, you can not only use your home to pay for your own 2 week vacation (or what have you), you won’t have to pay taxes on that income, either.
“There's a special rule if you use a dwelling unit as a residence and rent it for fewer than 15 days. In this case, don't report any of the rental income and don't deduct any expenses as rental expenses.” ( From IRS Topic 415, Renting Residential and Vacation Property, Minimal Rental Use)
So if you’re in a position to do it, and you are comfortable renting your home for a couple of weeks while you’re away, now is an excellent time. Every individual situation is unique, and as always, you should consult your tax advisor to see if there are any considerations for you to be aware of before taking advantage of this rule.
