Tax Free Rent?!

October 20, 2022
Author: Heather Connor, Realtor

Did you know that you may be able to make some extra tax-free cash on the rental of your Crested Butte home?

It's true. Let's dig into 4 fun quick facts on what we are referencing which is IRS code 280a and sometimes referenced as the 14-day rule.

1. The IRS does not set any limit on the dollar amount of the rental income, only on the number of days a property can be rented before it becomes a taxable event.

If you rent your home out for 14 days or less per year, you will want to report your income on your tax return. Reference 280a and it will not be taxable.

2. The 14 days is per property, NOT per owner.

3. You can rent to your corporation, get tax-free rent, and write off for your business.

Talk to your savvy CPA on how to leverage this idea.

4. Note of Caution

Usage of a family member, charitable donations, house swaps, and other such events will probably count towards your 14 days. If you’re curious on how this IRS rule will work in your benefit, check in with your tax advisor and real estate counsel.

If you have questions, send me a text. 619.333.7412.

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