The 15-Day Home Rental Rule

When you rent property, you have to report the income and pay any associated tax on it. But there is an exception – and particularly if you have a vacation or 2nd home, it’s worth knowing about.

Here’s how it works:

  1. The property must be a primary residence – that’s one you live in, at least part of the year. But there is no minimum required time – it could even be a day.
  2. The property can be a house, apartment, condo, mobile home, boat or something similar.
  3. You must rent the property for a total of LESS than 15 days during the year.

If you meet these three requirements then the rental income from the property is NOT treated as income.

So if you’re fortunate enough to have a vacation home near where a major event is going to be held (like the Super bowl or a Political Convention), or in a popular tourist location (like Maui or Cozumel), you can rent the property for top dollar and not have to pay tax on any of it. That’s how the home owners in Atlanta, Los Angeles and Salt Lake City were able to charge top dollar for use of their homes during the Olympics and not pay a dime of tax on it.

With a little advance planning and attention to a few details, that Vacation Home may also become another source of tax free revenue.

Contact us today to take a look at your rental property income to help you determine if you qualify. Call (480) 888-7111 or submit a web request here.

By: Evan A. Nielsen