The memories created at a vacation home with family and friends can be priceless.  I have experience owning both beach and ski homes, and can use my experience on not only your taxes, but in the decision making process.  It has been a great decision for myself, but it is important to talk through the decision and expectations before purchasing.

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Perhaps the biggest question on a vacation home is if clients would like to rent out the home part time to offset carrying costs.

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If you rent out your property 14 days or less a year, it’s considered a 2nd home residence. Because you are not required to report any rental income when you rent out the property,, you can not deduct any expenses relating to the rental. However, you can claim homeowner deductions, such as mortgage interest and real estate taxes.

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Mixed Use Vacation homes:

If you rent your vacation home more than 14 days in a calendar year and use the home for personal use,  your home will qualify as a mixed use vacation home. Expenses may be deducted on a prorated basis (and possibly the entire expense), based on number of rental use days / Total number of days used for personal and business purposes ratio.

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If you are thinking of buying a 2nd residence/vacation home, lets chat about all of the moving parts of the decision.

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