Here are some basics. Your home is a vacation home if you use it more than 14 days or 10% of the rental days. If you use it less, it's taxed as an investment property. If your home is an investment home you can deduct the costs of running the house and depreciate the house. YMMV depending on your usage and your accountant's understanding of the tax code. Now, if you have a specific question, go ahead and ask. I think all of us would remind you to run all of your thoughts past your accountant first.
I'd have the same advice as many others in this forum: start by talking with your CPA. If you don't have one, that should be your first priority. Make sure your CPA has experience in working with vacation rental property owners. Check into local laws, occupancy taxes, etc. - from the city level, to the county or township, to the State. Understand the rules before you even decide to move forward - you can save a lot of money and frustration by educating yourself in advance.
I have been handling one rental property for almost eleven years. You need an EIN, and need to collect State Sales taxes, and file a monthly form where you mail in the funds, and you need to collect Occupancy Taxes for the county your property is in, if the country has this tax. Otherwise, you file a Schedule E, rents and royalties, with your Federal Income taxes, and probably pay State Income Taxes, if your state has one. You can depreciate your property if you wish, and pay Long Term Capital Gains when you sell the property. That is about all I know about the taxes. On the Schedule E, that is where you deduct all the expenses, e.g. depreciation, utilities, cleaning fees, etc.
Hi, this is Ron Farrimond. I am a retired accountant that has been managing vacation rentals in Florida for over 20 years. We bought our first condo in 1999 and slowly added to our collection of vacation rentals until it became a full time job about 5 years ago. I obtained a Real Estate License a few years ago to help my clients who are looking to buy their own property. Please send me a private email at [email address] if you have specific questions I can help with.
Answers (1-10)
Here are some basics. Your home is a vacation home if you use it more than 14 days or 10% of the rental days. If you use it less, it's taxed as an investment property. If your home is an investment home you can deduct the costs of running the house and depreciate the house. YMMV depending on your usage and your accountant's understanding of the tax code. Now, if you have a specific question, go ahead and ask. I think all of us would remind you to run all of your thoughts past your accountant first.
I can very likely help you.
Send your question we will see if we can answer for sure
I'd have the same advice as many others in this forum: start by talking with your CPA. If you don't have one, that should be your first priority. Make sure your CPA has experience in working with vacation rental property owners. Check into local laws, occupancy taxes, etc. - from the city level, to the county or township, to the State. Understand the rules before you even decide to move forward - you can save a lot of money and frustration by educating yourself in advance.
I have been handling one rental property for almost eleven years. You need an EIN, and need to collect State Sales taxes, and file a monthly form where you mail in the funds, and you need to collect Occupancy Taxes for the county your property is in, if the country has this tax. Otherwise, you file a Schedule E, rents and royalties, with your Federal Income taxes, and probably pay State Income Taxes, if your state has one. You can depreciate your property if you wish, and pay Long Term Capital Gains when you sell the property. That is about all I know about the taxes. On the Schedule E, that is where you deduct all the expenses, e.g. depreciation, utilities, cleaning fees, etc.
Hope this helped.
We can answer vacation rental questions and tax questions related to our rental business but we are not tax experts
What do you need help with
Hi, this is Ron Farrimond. I am a retired accountant that has been managing vacation rentals in Florida for over 20 years. We bought our first condo in 1999 and slowly added to our collection of vacation rentals until it became a full time job about 5 years ago. I obtained a Real Estate License a few years ago to help my clients who are looking to buy their own property. Please send me a private email at [email address] if you have specific questions I can help with.
All the Best,
Ron
Where is the location of the rental? It will make a big difference.
Hi
Im a vacation rental expert with 5 years of experience but I'm not a tax specialist. Happy to assist in anyway I can.
Gwen Ryan