Tax Relief - Expenses on Vacation Homes
All children just love the two words Summer Vacation, it can be anywhere and they would enjoy doing just anything.
It is a great time to have a vacation and families can together enjoy resorts, water parks, family summer camps etc.
It is possible to enjoy the vacation with the logistics taken care of with a variety of daily activities at very reasonable cost.
If you are tired of using your vacation home, renting it out can be a profitable proposition and you can also claim tax relief in respect of the expenses, to boot.
Examples of such expenses are amounts spent on maintenance, payment for utilities, taxes on property and insurance paid.
Depreciation on the property is also an eligible deduction.
All these deductions make for considerable tax relief and you may end up with not having to pay any tax at all on the income earned from renting.
However, there may be a situation where you live in the same home and also rent it out.
This is particularly true of vacation homes which are used as home only for vacations and not all the time.
You may like to earn rental income from the vacation home during rest of the year.
However, in such a situation, the deductions allowed to you for your expenses related to the house against your rental income are restricted.
The expenses have to be divided between the personal use of the house and the rental use in the proportion of the number of days for each kind of user.
The full tax relief can be claimed, however, if you limit personal use of the home to 14 days in a year or 10 percent of the total number of days for which it is rented out.
It is a great time to have a vacation and families can together enjoy resorts, water parks, family summer camps etc.
It is possible to enjoy the vacation with the logistics taken care of with a variety of daily activities at very reasonable cost.
If you are tired of using your vacation home, renting it out can be a profitable proposition and you can also claim tax relief in respect of the expenses, to boot.
Examples of such expenses are amounts spent on maintenance, payment for utilities, taxes on property and insurance paid.
Depreciation on the property is also an eligible deduction.
All these deductions make for considerable tax relief and you may end up with not having to pay any tax at all on the income earned from renting.
However, there may be a situation where you live in the same home and also rent it out.
This is particularly true of vacation homes which are used as home only for vacations and not all the time.
You may like to earn rental income from the vacation home during rest of the year.
However, in such a situation, the deductions allowed to you for your expenses related to the house against your rental income are restricted.
The expenses have to be divided between the personal use of the house and the rental use in the proportion of the number of days for each kind of user.
The full tax relief can be claimed, however, if you limit personal use of the home to 14 days in a year or 10 percent of the total number of days for which it is rented out.
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