Image by jimflix! via Flickr
Owning a vacation home once considered a luxury, is now becoming a burden in today’s challenging economic times. Instead of having your vacation home just sit there collecting dust, you can make money of your property and offset your expenses. Here are some ways you can make money off your vacation home.
- Use for Renting
The options available for using your vacation home as a rental include renting it for less than or for more than 14 days a year. You can deduct mortgage interest and property tax when you rent for less than 14 days. Also, rental income is tax-free and doesn’t have to be reported on your tax return. However, when you rent for more than 14 days, all of your rental income is taxed. An advantage to this rental option is being able to write-off rental-related expenses including utility and maintenance.
- Use as a Family Investment
As noted in an article from the Wall Street Journal, you can distribute the cost of your vacation home by allowing family members to purchase interest. This can be done by forming a limited partnership or limited liability company with your family members. Doing this can allow shareholders to have use of the property and pay their portion of expenses.
- Auction Use of Your Home for Charity
Charities looking for homes to host events will generally have people bid on the time they will use the home and donate the money to the charity. The benefit is you can deduct the fair market rental value on your income taxes. Organizations such as VacationHomesForCharity.org brings homeowners and charities to together.
