While owning a vacation rental can be a lucrative investment, it's essential to understand the tax implications that come with it. Fortunately, the Internal Revenue Service (IRS) provides valuable information on properly reporting rental income and expenses in Publication 527. By following these guidelines, property owners can maximize their profits and optimize their taxes.
One of the first things property owners must understand is whether their property qualifies as a personal residence or a rental property. This distinction affects how expenses are deducted and which deductions are available. Additionally, Publication 527 outlines which vacation rental expenses are tax deductible, including mortgage interest, property taxes, insurance premiums,
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