[Editor's Note: This is a guest post by David Shindel, CPA, MFE. This post was placed with his permission (and suggested by him).
Summertime is vacation rental time, and if you’re the landlord of a property used for vacation rentals, the IRS has provided tips on renting a house, cabin, apartment, condominium, mobile home, or boat. Rental income must be reported as taxable income on Schedule E (Supplemental Income and Loss), unless the property is also used personally and rented out for less than 15 days per year. The rental income may also be subject to the new net investment income tax that applies beginning in 2013.A net loss on the rental activity is generally subject to passive loss limitations under IRC Sec. 469. If the property is used personally for part of the time, the expenses must be allocated between the rental and personal use, based on the number of days used for each purpose. Any deductible expenses for personal use, such as mortgage interest and property taxes, are reported on Schedule A (Itemized Deductions). Additionally, if the property is used as a personal residence for part of the time, the renal expense deduction is limited to the rental income received. See http://www.irs.gov, and then click on “Tax Tips.”
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ShindelRock is a Metro Detroit accounting firm offering a broad array of services to individuals and business owners, including accounting, auditing, tax, litigation support, medical practice management and business consulting. For more than twenty years, its team of accounting professionals has been recognized for understanding the financial and management needs of physician practices and a commitment to superior client service. www.shindelrock.com
Advisory services through Capital Advisory Group Advisory Services LLC and securities through United Planners Financial Services of America, a Limited Partnership. Member FINRA and SIPC. The Capital Advisory Group Advisory Services, LLC (CAG) and United Planners Financial Services are not affiliated.
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