Vacation Home; no deductions, no inclusion, for less-than-15-day rentals.

Under a de minimis rule, if a home is rented for less than 15 days a year, the owner can’t deduct any of the rental expenses, but isn’t taxed on any of the rental income. If an individual, trust, estate, partnership or S corporation owns a vacation home or a dwelling unit and uses it for both personal and rental purposes, deductible expenses are limited, except for those expenses that are deductible without regard to business use of the property—e.g., mortgage interest and property taxes. ]

The owner’s personal use of the home or portion of it for even one day in the tax year triggers these “vacation home” limits. Taking advantage of such tax guidance can result in substantial untaxed income.