Converting your vacation home into an income generating rental property requires a number of things to be done and this also includes dealing with Uncle Sam. Even if you plan to rent out your home for just a few weeks you could get a number of tax benefits but don’t get too excited as these benefits to a large extent depend upon your income and how often the home is put to use.
All this depends upon for how long the property has been rented. In case a house is rarely rented i.e. if it is rented for less than fifteen days in a year then there is no need to report the rental income though the home is still eligible for mortgage interest and write offs.
In case the home is rented out for more than a period of fifteen days or more it is compulsory to report the rental income and the house owner can deduct expenses with regards to maintenance of the property. In another case where the property is used for a longer duration of time the rental income would have to be reported and expenses associated with operation of the house could be deducted but since the property is being used for more than two weeks, as per the law one could not write off something more than the value of annual rental income.
