During the summer, this is a good time to take advantage of one of the best breaks in the tax code. You can rent a house to someone for up to 14 days and pay no tax on the income you receive. You don’t even have to report the rental income on your tax return.
Suppose you live near a major sports event, such as a golf tournament. You might be able to pocket thousands of dollars by renting it for the time immediately before and after the event, then moving in with a friend or relative.
You can do the same thing with a second home. If you have a beach house, for instance, you can stay home for a couple of weeks this summer while letting someone else enjoy the sun and sand. As long as you use the house for more than 14 days during a calendar year, it will be classed as a residence and offer the opportunity for up to 14 days of tax-free rental income.
Even if you use this tax break, you still can deduct a year’s worth of mortgage interest and property taxes for that home, as long as you otherwise qualify for the deductions. If you’re collecting tax-free income, though, you can’t also deduct expenses associated with the property rental, such as advertising.
