With any real estate purchase it’s important to understand the tax implications and if you’re thinking of buying a vacation home this season, you should be familiar with the 14 day rental rule.
It’s not unusual for vacation homeowners to rent the property to offset some of the expenses or to generate income, but the tax benefits to which an owner may be entitled depends on the number of days each year that the property is rented out.
One such benefit is called the 14 day rule also known as the “Master’s Exemption” because of it’s popularity in Augusta, GA during the famous April golf tournament. If your home is rented for fewer than 15 days per year, the income is tax-free. And there is no limit on the amount of rent you can charge.
Some owners are able to recoup month’s worth of property taxes, dues and other expenses with just a one or two week rental.
For more information on buying or selling a vacation home and tips on things to consider; contact Nishika Green direct: (410) 952-2641.
The purpose of this article is not to provide tax advice. Please contact your accountant or tax representative for details on your vacation home income and expenses.