Personal Use of Business Property (Condo, Timeshare, etc.)
Question: I rent my home out for two weeks each year. Do I have to show the income on my return?
Answer:
You must first consider if you use any dwelling unit as a home. You are considered to use a dwelling unit as a home if you use it for personal purposes during the tax year for more than the greater of:
- 14 days
- 10% of the total days it is rented to others at a fair rental price
There is a special rule if you use a dwelling unit as a home and the same dwelling unit is rented for fewer than 15 days during the tax year. In this case:
- Do not report any of the rental income.
- Do not deduct any expenses as rental expenses.
- If you itemize your deduction on Schedule A (Form 1040), Itemized Deductions, you may be able to deduct mortgage interest, property taxes, and any casualty losses.
It is possible that you will use more than one dwelling unit as your home during the year. For example, if you live in your main dwelling unit for 11 months and in your vacation home for 30 days, your main dwelling unit is a home and your vacation dwelling unit is also a home unless you rent your vacation dwelling unit to others at a fair rental value for more than 300 days during the year.
Additional Information:
- Publication 527, Residential Rental Property (Including Rental of Vacation Homes)
- Tax Topic 415, Renting Residential and Vacation Property
Category: Sale or Trade of Business, Depreciation, Rentals
Subcategory: Personal Use of Business Property (Condo, Timeshare, etc.)
