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Frequently Asked Tax Questions

Sale or Trade of Business, Depreciation, Rentals - Personal Use of Business Property (Condo, Timeshare, etc.)

  1. I rent my home out for two weeks each year. Do I have to show the income on my return?
  2. I am renting a house to my son and daughter-in-law. Can I claim rental expenses?

Rev. date: 2/15/2011

I rent my home out for two weeks each year. Do I have to show the income on my return?

You must first consider if you use any dwelling unit as a home.

You are considered to use a dwelling unit as a home if you use it for personal purposes during the tax year for more than the greater of:
There is a special rule if you use a dwelling unit as a home and the dwelling unit is rented for fewer than 15 days during the tax year. In this case:
It is possible that you will use more than one dwelling unit as a home during the year. For example, if you live in your main dwelling unit for 11 months and in your vacation home for 30 days, your main dwelling unit is a home and your vacation dwelling unit is also a home unless you rent your vacation dwelling unit to others at a fair rental value for more than 300 days during the year.

Rev. date: 2/15/2011

I am renting a house to my son and daughter-in-law. Can I claim rental expenses?

In general, if you receive income from the rental of a dwelling unit, such as a house, apartment, or duplex, there are certain expenses you may deduct.
Besides knowing which expenses may be deductible, it is important to understand potential limitations on the amounts of rental expenses that may be deducted in a tax year.
There are several types of limitations that may apply.
Not for profit activities:
Rental of a dwelling unit:
Passive Activity losses:
At risk rules: The at-risk rules limit your losses from most activities to your amount at risk in the activity.