RENTING YOUR CABIN?

THESE COMMENTS ARE GENERAL IN NATURE -- PLEASE CONSULT AN ACCOUNTANT FOR YOUR SPECIFIC SITUATION.

 

 THE 14 DAY RENTAL RULE:

 

The following are basic provisions of the 14 day rental rule:

  • If the owner never occupies a second home and rents it year round, the IRS will regard it as a rental property.  If the property is neither rented nor owner occupied, it is regarded as an investment property.
  • If the property is owner-occupied part time and rented for 14 days or less in a year, the owner is not required to report the rental income on a tax return. No tax deductions can be claimed for the property's expenses or upkeep if no inome is reported from it.
  • If a property is rented for more than 14 days, all rental income must be reported.  Income may be offset  with deducions for the rent-related portion of expenses such as utilities and maintenance; a depreciation deduction may also be claimed against the rental income.
  • If the property is owner occupied for more than 14 days or 10 percent of the time it was rented (whichever is greater), deductible expenses must be allocated between rental and personal use time.  Time spent working on, repairing, and maintaining the property is not considered in the 14 day usage.