June 23, 2022 - Douglas Myser

Tax rules for your vacation rentals. If you use a service for renting out your vacation home, such as VRBO and Airbrib, you will get a 1099-K IRS tax form, for transactions conducted through their website. Since most rentals processed through those sites offer significant services with the rental, this would be considered self employment income subject to Self Employment tax. The IRS has provided for an interactive Tax Assistance to determine the status and treatment of the rental activity. Know that rental income is taxable income. Property or services received as payment is rental income. You must include the fair market value of the property or services in your rental income. If the services are provided at an agreed upon or specified price, that price is the fair market value unless there is evidence to the contrary. Tax rules for your vacation rentals.

The payments the tenant pays for your rental expenses are rental income. The rental payments are taxable. You may have some deductible expenses, so keep track of any you have to lower your taxable income. Your condo fees are deductible. You can deduct assessments for the care of the common parts of the structure such as land, lobbies, elevators, and service areas. You cannot deduct special assessments you pay to a condo management corporation for improvements. But you may be able to recover your share of the cost of any improvement by taking depreciation. The insurance premiums you pay for the rental property are deductible. The mortgage interest you pay on your rental property is deductible. Keeping track of your expenses can be done easily, by apps that have been made to do so.

If you didn't keep track of your expenses, and now have a large tax debt, we can help. Our 36 year old Tax Resolution Company is a leader among Tax Resolution Companies. We can file any unfiled tax returns, then determine your Tax Relief options, such as the IRS Fresh Start Program or options outside that program. We make Tax Resolution easy on you. We have a Nationwide tax firm, so call today for a free, confidential Tax Resolution Services consultation. 1-888-689-7861