![]() ![]() The first and probably most popular reason to use this loophole is if you live in an area convenient to a major event that draws a lot of visitors to your city. When to Use the 14-Day Loophole on Rental Property In other words, the loophole doesn’t apply to someone who wants to regularly rent out a spare bedroom in their home or who has a second property that they use exclusively as a rental, but it’s incredibly useful in certain situations. The one downside is, if you’re using this loophole, you can’t report the expenses from renting your place to reduce your personal taxable income. You rent it out fewer than 15 days a year.You use it as a residence at least 14 days of the year.The 14-day loophole-explained by the IRS in Topic 415-states that you don’t have to report the income or pay taxes on a rental property as long as: I know this sounds too good to be true, but it really is that simple. The Basics of the 14-Day Loophole on Rental Property (aka The Masters Rule) ![]() This special rule allows you to not pay taxes on a rental property-in fact, not even report the income-if you live at the property and rent it out for 14 days or less in a year. Whatever the reason, if you’ve been avoiding renting on Airbnb or a similar marketplace for tax purposes, there’s a loophole you need to know about. ![]() Or maybe you just don’t want to deal with the hassle of filing rental taxes-tracking expenses, having yet another form to fill out, worrying you have another place to mess something up. Maybe you’ve dabbled with the idea of renting out your property to make some extra money but are worried it’ll end up costing you more than it’s worth come tax time. ![]()
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