{"id":20,"date":"2014-08-06T09:15:59","date_gmt":"2014-08-06T09:15:59","guid":{"rendered":"http:\/\/www.hsco-cpa.com.php73-40.lan3-1.websitetestlink.com\/blog\/\/?p=20"},"modified":"2014-08-01T22:03:48","modified_gmt":"2014-08-01T22:03:48","slug":"tax-free-income-from-renting-your-home","status":"publish","type":"post","link":"https:\/\/www.hsco-cpa.com\/blog\/tax-free-income-from-renting-your-home\/","title":{"rendered":"Tax-Free Income From Renting Your Home"},"content":{"rendered":"

Tax-Free Income From Renting Your Home<\/strong><\/p>\n

From Canton, Ohio, where the Pro\u00a0Football Hall of Fame Weekend\u00a0takes place in August, to Los Angeles,\u00a0which has Haunted Hayrides to\u00a0celebrate Halloween throughout\u00a0October, cities small and large host\u00a0special events throughout the year.\u00a0Moreover, oceanfront communities\u00a0attract millions of tourists in the\u00a0summer while mountain regions offer\u00a0winter sports each winter.<\/p>\n

What is the common\u00a0denominator? If you live in an area\u00a0popular with tourists, for a season\u00a0or a month or even a day, you can\u00a0rent your home for a sizable amount.\u00a0According to some reports, homes in\u00a0the Augusta, Georgia area rent for as\u00a0much as $20,000 for the week of the\u00a0Masters Golf Tournament in April.<\/p>\n

Moreover, income from such\u00a0rental activity is legitimately taxfree:\u00a0you don\u2019t have to report it on\u00a0your tax return. You can\u2019t deduct any\u00a0expenses incurred for the rental, but you still can take applicable mortgage\u00a0interest and property tax deductions\u00a0for your home with no reduction for\u00a0the profitable rental period.<\/p>\n

Fortune\u2019s fortnight
\n<\/strong>As you might expect, you have to\u00a0clear some hurdles to qualify for\u00a0this tax-free income. Perhaps most\u00a0important, you must rent the home\u00a0for no more than 14 days during the year. If you go over by even one\u00a0day, tax-free taxation will vanish.\u00a0In that case, you will have to report\u00a0your rental income, and you may\u00a0take appropriate deductions, but the\u00a0process can become very complicated.<\/p>\n

In addition to the 14-day limit, \u00a0the IRS says that you must use the\u00a0\u201cdwelling unit as a home.\u201d This means\u00a0that you must use the property for\u00a0personal purposes more than (a)\u00a014 days or (b) 10% of the days it\u00a0is rented to others at a fair price,\u00a0whichever is greater.<\/p>\n

Example 1:<\/strong> Jan Harrison lives\u00a0in Charlotte, North Carolina,\u00a0throughout the year but rents her\u00a0home for a week when the Bank of\u00a0America 500 race is in town. She\u00a0moves in with her sister and then\u00a0goes home after the weeklong rental\u00a0ends. Jan lives in her home well over\u00a0300 days in the year, so claiming the\u00a0tax-free rental income won\u2019t be a\u00a0problem.<\/p>\n

You also can claim this tax break\u00a0for a vacation home as long as there\u00a0are at least 15 days of personal use\u00a0and you keep rentals under 15 days a\u00a0year. With either a primary residence\u00a0or a second home, keep careful\u00a0records to show that you observed\u00a0the 14-day rental limit.<\/p>\n

Proceed prudently
\n<\/strong>Tax-free income is certainly welcome,\u00a0but it shouldn\u2019t be your only concern.\u00a0Keep in mind that you are letting\u00a0other people occupy your home,\u00a0perhaps during a time when parties\u00a0may occur. Make sure you have a\u00a0formal rental agreement in place and\u00a0that you collect the rent upfront,\u00a0along with a deposit for possible\u00a0property damage. Check with your\u00a0homeowners insurance agent to see if\u00a0you need special coverage, and check\u00a0with local officials to find out if you\u00a0need a permit for a short-term rental.<\/p>\n

If you decide to use a service to\u00a0handle the rental and save you some\u00a0aggravation, ask what fees you\u2019ll owe.\u00a0In addition, ask if the rental income\u00a0will be reported to the IRS. Such\u00a0reports may complicate what can be a\u00a0straightforward tax benefit; our office\u00a0can explain the possible problems and\u00a0solutions.<\/p>\n","protected":false},"excerpt":{"rendered":"

Tax-Free Income From Renting Your Home From Canton, Ohio, where the Pro\u00a0Football Hall of Fame Weekend\u00a0takes place in August, to Los Angeles,\u00a0which has Haunted Hayrides to\u00a0celebrate Halloween throughout\u00a0October, cities small and large host\u00a0special events throughout the year.\u00a0Moreover, oceanfront communities\u00a0attract millions of tourists in the\u00a0summer while mountain regions offer\u00a0winter sports each winter. What is the common\u00a0denominator?… Continue reading Tax-Free Income From Renting Your Home<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.hsco-cpa.com\/blog\/wp-json\/wp\/v2\/posts\/20"}],"collection":[{"href":"https:\/\/www.hsco-cpa.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.hsco-cpa.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.hsco-cpa.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.hsco-cpa.com\/blog\/wp-json\/wp\/v2\/comments?post=20"}],"version-history":[{"count":1,"href":"https:\/\/www.hsco-cpa.com\/blog\/wp-json\/wp\/v2\/posts\/20\/revisions"}],"predecessor-version":[{"id":21,"href":"https:\/\/www.hsco-cpa.com\/blog\/wp-json\/wp\/v2\/posts\/20\/revisions\/21"}],"wp:attachment":[{"href":"https:\/\/www.hsco-cpa.com\/blog\/wp-json\/wp\/v2\/media?parent=20"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.hsco-cpa.com\/blog\/wp-json\/wp\/v2\/categories?post=20"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hsco-cpa.com\/blog\/wp-json\/wp\/v2\/tags?post=20"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}