The 411 on Tax Rules
My husband and I own a vacation home. Now that it’s so easy to rent through sites like Airbnb or VRBO, we figure it only makes sense to rent it for part of the year. What does this mean for taxes?
Dear Reader, Great idea—and great question. More and more people are taking advantage of the relative ease of renting through online rental services, whether a vacation home or a part of their own house. I’ve heard it described as “found money.” However, while the extra income can be a real boost, the tax rules can be mind-numbingly complex. That doesn’t mean you shouldn’t give it a try. It just means you need to be aware of the rules before you start the process so you know what you’re getting into.
I can give you some basics, but I urge you to talk to your tax advisor so you understand how the rules apply to your situation. You might also want to consult IRS Publication 527, which spells everything out in detail.