Vacation Home Rental

If you use your vacation property as a residence and rent it for 15 days or more, then you will want to report the rental income on Schedule E. See Rental Income

There's a special rule if you use a dwelling unit as a residence and rent it for fewer than 15 days. In this case, you wouldn't report any of the rental income and you wouldn't deduct any expenses as rental expenses.

You're considered to use a dwelling unit as a residence if you use it for personal purposes during the tax year for more than the greater of:

• 14 days, or
• 10% of the total days you rent it to others at a fair rental price

You may use more than one dwelling unit as a residence throughout the year. For example, if you live in your main home for 11 months, it qualifies as a dwelling unit used as a residence. If you then live in your vacation home for the remaining 30 days of the year, it also qualifies as a dwelling unit used as a residence, unless, in this example, you rent the vacation home to others at a fair rental value for 300 or more days during the year.