Washington Alert-Part I

…A taxpayer who owns a vacation home that he or she rents to others “generally must report the rental income” on a federal income tax return, IRS has reminded taxpayers. (Summertime Tax Tip 2013-08) “But you may not have to report that income if the rental period is short,” IRS said. As described by the agency, a vacation home can be a house, apartment, condominium, mobile home or boat. The agency offered the following tips regarding the subject – rental income and deductible rental expenses are usually reported on Schedule E, Supplemental Income and Loss; if the taxpayer personally uses the property and sometimes rents it to others, special rules apply; if the property is “used as a house,” the rental expense deduction is limited; and if the property is “used as a house” and it is rented for less than 15 days per year, the taxpayer does not have to report the rental income. IRS suggested taxpayers consult Publication 527, Residential Rental Property (Including Rental of Vacation Homes). The tax tips can be found here.

© 2013 Thomson Reuters/RIA. All rights reserved.

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