Understanding the Definition of a Second Home for the IRS
When it comes to taxes, understanding what is considered a second home is important. A second home, according to the IRS, is a property that is not your primary residence but is used for personal purposes. This can include a vacation home, a cabin in the woods, or a beach house. To qualify as a second home, the property must be occupied by the owner for at least 14 days per year or 10% of the total days the property is rented, whichever is greater. It is essential to remember that a second home is not the same as an investment property, which is a property used primarily for generating income through rental or resale.The Different Ways You can Use a Second Home
Second homes can be used in a variety of ways, and how you use them impacts how they are taxed. The following are the different ways you can use a second home:- Personal Use: The owner uses the property solely for personal purposes, such as vacationing.
- Rental Use: The owner uses the property primarily for renting out to others.
- Combination Use: The owner uses the property for both personal use and rental purposes.