Vacation home deductions

Vacation home deductions are limited for United States federal income tax purposes.

Generally, a taxpayer may not deduct expenses related to a vacation home since he or she usesthe property for personal enjoyment. [IRC § 280A(a).] However, a taxpayer may claim limited deductions on a vacation home if the taxpayer uses the property as both a vacation home and rental property. [IRC § 280A(d).]

If the taxpayer uses the property for the greater of 14 days or 10% of the number of days of theproperty is rented, the taxpayer may deduct some of the property-related expenses. [IRC § 280A(e)(1).] Thesedeductions are limited to the gross income from the rent less the general expenses attributable tothe rental use of the property. [IRC § 280A(c)(5).] The taxpayer may deduct the expenses related to the propertylimited to (i) the number of days the property was rented at fair market rental value over (ii) thetotal number of days the property was used. [IRC § 280A(e).] For example, if the taxpayer used the property for40 days and rents the property for 80 days, the taxpayer may only deduct 50 percent of theproperty-related expenses.

If the taxpayer rents the property for less than 15 days, the taxpayer may not deduct anyproperty-related expenses. [IRC § 280A(g)(1).] However, in this case, the taxpayer does not have to include asincome any rent attributable to the property. [IRC § 280A(g)(2).]

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