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» From: Rowlett, TX Dear TaxMama: My husband and I purchased a vacation condo last year in Branson. The condo is on a floating week program which allows us to either use the condo or cash it in and vacation somewhere else they have property. We can also rent the property out through an agency. Can we rent the property for 1 week and also deduct the interest on the payments from our tax return? Thank you very much for your help. Ramona Dear Ramona, There's an interesting little feature of the tax laws with respect to renting your residence (and ONE vacation home falls under the definition) - you can rent it out for 14 days or less and not pay taxes on the income. So, yes, you can keep the money, tax free. And still deduct the interest expenses on Schedule A. In fact, when the Olympics came to Los Angeles, I helped a friend build a whole company around that little known law. He signed up hundreds of homes that were rented out to visitors to Southern California for the Olympic Games. Then, for the next 10 years, that business kept providing vacation money to those homeowners as they rented out their houses and used the money for their own exotic vacations. (Alas, the company is no longer. It died with dear Layne.) Best wishes, Eva Rosenberg Your TaxMama  |
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