If you use a vacation home fewer than 14 days a year or less
than 10 percent of the days it’s rented to outsiders each
year, whichever is greater, then your home is an investment
property. If you use the home 15 or more days a year or
more than 10 percent of the days you rent it to outsiders,
it’s a second home.
This makes a difference, for tax purposes. If you’re able to
declare the property as a second home, you can collect up
to 14 days of rental income without paying taxes on it.
However, if it’s an investment, you would have to declare
the income. Then you can deduct business expenses such as
advertising, cleaning, maintenance, etc.
In calculating the days you use the property, “work days”
don’t count toward the 14-day, 10 percent test. For
instance, if you spent the day landscaping and installing
new appliances, you were working on the house and not
using it. You should keep a log for tracking your own
activities; visitors can sign this log, too, as a “guest
book.”
