Did you know that if you rent out your second home for fewer than 14 days a year, then it is not considered a rental property? Did you know that the money you collect by renting for fewer than 14 days a year is tax-free?
That’s right. It’s known as the “Masters Provision,” named after the Augusta National Golf Club in Augusta, Georgia where the Masters Tournament takes place each year. Homeowners around this sprawling, green golf course have caught on early that they can rent out their homes and collect a pretty penny from visitors attending the tournament, and simply pocket the money – tax-free. But you don’t have to have a house in Augusta, Georgia to do this. And you don’t have to rent out your second home for such a minimal amount of time to make a big profit.
Check out this article written by Lauren Baier Kim of the Wall Street Journal to learn how taxes work for vacation rentals. For an in-depth look at taxes for second homes, refer to what the IRS says regarding the Rental of Vacation Homes.