I am considering purchasing a second home. What qualifies as a second home?
To determine what qualifies as a second home, some basic amenities must be available. Amenities must include sleeping, cooking, and toilet facilities. Any of following can qualify as a second home:
- Mobile home
- House trailer
- Property similar to the above properties If you are purchasing the second home to use as a rental property, you may qualify for tax deductions for your expenses. Deductible expenses on your second home may include the following: maintenance insurance HOA fees If you are planning split use of the property — meaning as a rental property and for personal use — you will have to calculate the amount of time (or number of days) the property is used as a rental and the amount of the time (or number of days) you use the property for your personal use. This calculation will help you determine the portion of your expenses that may qualify for a tax deduction. Only the rental expenses will qualify for a tax deduction. You will need to use Form 1040: Schedule E
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So how much will you get (or owe) this year? That’s the million-dollar question. We happen to have three very useful calculators to help you estimate your refund or balance due.