There are Rules for Rental Property 7 days or less

8/7/2019

If you own a condominium, cottage, cabin, lake or beach home, ski lodge, or similar property that you rent for an “average” rental period of seven days or less for the year, you have a property with unique tax attributes.

Seven days example. Say you have a beach home and you rent it 15 times during the year, for a total of 85 days. What is your average rental. Is it an average of seven days?

The right type of beach home or vacation cottage can produce great tax results when the average rental period is within our seven days example. But it’s tricky because when the average rental period is within our seven days example, the property is not a rental property as defined by the tax code. Instead, the property is a commercial hotel type property that you report on Schedule C of your tax return.

However, If you have a profit on the rental you likely will qualify for the 20% deduction, depending on your tax filing strategy.

The tax law has also imposed restriction on a loss of $20,000 for the year, in which you likely have only two ways to take advantage of this tax strategy.

Schedule Your Tax Strategy-Now.

0 Comments

If you Value our Blog, We have an ask.

We spend hours researching data to help you understand your finances and taxes, including historical context, issues, and solutions. Our goal is to empower people to improve their relationship with money. Please consider a $3 donation today.

Tax Plan Video

Important Disclosures

Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

GET STARTED

Author

Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion. Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.

Keana founded this website and decided and created this blog page to offer a space for those seeking knowledge to understand, however not to be confused with advice or planning strategies.

RSS Feed