Oftentimes, as Harbor Country Real Estate agents and advisors here at Shoreline Property Advisors, we get the question from potential buyers about the options for renting out their Harbor Country home when they’re away. Of course we think this is a great idea for those who use their home only part of the year as their vacation destination as it helps to help offset their costs and keep the home from sitting empty!
However, there are a few things that buyers will want to know prior to taking on the role of a landlord. There are the aspects of marketing the home, hiring a professional cleaner in between guests and scheduling year round vacationers, but oftentimes what buyers don’t take into consideration is the tax portion of using their vacation home in Harbor Country as a rental.
We thought it would be helpful to give you a quick rundown of some of the basic tax points you’ll want to know and discuss with your Harbor Country Real Estate agent. Take a look!
- If you live in your Harbor Country home for a portion of the year and rent it out the other part of the year; you’ll have to divide your expenses based on the number of days for each use.
- Personal use means any time you, or someone else who does not pay rent, is using the Harbor Country home. In fact, if you rent the property out for less than 15 days a year, you don’t need to report any rental income. Consequently, while your rental income is tax free, you won’t be able to claim any rental expenses.
- If you use your home more than 14 days, or more than 10% of the days it’s rented out; your home is considered a “vacation home used as a residence.” That means, if you have a net loss (if your expenses exceed your income), you can’t use the excess expense to offset the income from other courses. You have to carry your loss to the next year to be treated as rental expenses.
- If you’re using your Harbor Country home for less than 15 days, or no more than 10% of the days it’s rented, it’s viewed as a “vacation home used as a rental property.” You’ll need to report and pay taxes on the income less your rental expenses. However, losses come under complicated passive and hobby loss rules and you’ll want to consult with a professional.
We hope that this helps shed some light on renting out your vacation home in Harbor Country! While there are a lot of details that go into renting out your home, our team of experienced Harbor Country Real Estate agents can guide you through the process to ensure your success in being a landlord for your Harbor Country home.
Feel free to contact us today to get started!
Shoreline Property Advisors
@ Prudential Rubloff
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.