Income from Summer Rentals

Friday, August 7, 2015
Do you own a second home that you use as a vacation property? This could be a house, condominium, apartment, mobile home or boat. Often times, an individual needs to report their income from a rental on their federal income tax return, if they rent that vacation property to others. However, there is a chance that the income will not need to be reported to the IRS if the rental time frame period is short.  Tax professionals report that the expenses related to a vacation rental property can be deducted from their tax liability. Although, if that property is also used as their residence for any part of the year, then the deduction may be limited.

We are the Strategic Tax Lawyers, a firm with Payroll Tax Lawyers, IRS Leniency Program Lawyers, and IRS Fresh Start Lawyers.  Our firm has many successful years of winning cases related to the IRS tax code. At this time, we want to notify you about the rental properties and importance of keeping your documents and related tax information in order.

There are tips about rental properties that the IRS provides.  A Schedule E, Supplemental Income and Loss Form is recommended to report your rental income and any deductible rental expenses. Your rental income may also require that you pay a Net Investment Income Tax. Also, if you use the property as your main residence, but rent it out to others occasionally, then there are some special rules that apply. A tax professional may need to assist you since the calculations can become complicated which could red flag the IRS.  For example, you will need to divide your expenses between the rental use and the personal use and the number of days used for each purpose will determine how to divide the costs.  In addition, A Schedule A, Itemized Deductions will be needed to itemize your deductible expenses for personal use.  These deductible items may include mortgage interest costs, property taxes or any related casualty losses.  Also, your rental expense deduction can be limited meaning that your deductions for any rental expenses should not be greater than the rent received. Also, if the property is used as your personal home and is only rented out fewer than 15 days per year, you will not need to report the rental income on your tax return.
The Strategic Tax Lawyers, LLP are a firm of Payroll Tax Lawyers, IRS Leniency Program Lawyers, and IRS Fresh Start Lawyers. We, at the Strategic Tax Lawyers Firm, are experts in the IRS tax code with years of experience dealing with estate taxes and other tax-related matters.  Call the Strategic Tax Lawyers at (800) 669-4775 for a free consultation to assist you with your case.