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Vacation Home Rentals
Obama Promises to Sign Democrats' Middle-Class Tax Cut Bill
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suzanne
Suzanne LoBiondo, CPA
516-791-1303 x306

 
 
Chris
Chris Cheeseman, CPA
516-791-1303 x305

Dear Clients and Friends,

 

It's hard to believe that August is already here.  Labor Day is just around the corner, marking the end of summer.  That also means that the extended due date of September 15 for corporate, partnership and fiduciary returns will be here before you know it, so please send us the information to prepare any extended returns.

 

C&L will again have a booth at the Merrick Fall Festival and Street Fair, located at the Merrick train station and north along Merrick Avenue.  This year the festival will be held on Saturday and Sunday, September 8 and 9.  We hope you will come down for the festivities and stop at our booth to say hello.

 

Enjoy the rest of the summer, and we hope to see you at the festival.   

 

Very truly yours,

Suzanne LoBiondo and Christopher Cheeseman

 

 Vacation Home Rentals

Do you have a second home that is rented out?  If this home is also used personally, special vacation home rules may apply.

 

Income that you receive for the rental of your vacation home must generally be reported on your federal income tax return. However, if you rent the property for only a short time each year, you may not be required to report the rental income.

 

Rental Income and Expenses  Rental income, as well as certain rental expenses that can be deducted, are normally reported on Schedule E, Supplemental Income and Loss.  If a residence is used completely as a rental property, all income and expenses must be reported.

 

Limitation on Vacation Home Rentals  When you use a vacation home as your residence and also rent it to others, you must divide the expenses between rental use and personal use, and you may not deduct the rental portion of the expenses in excess of the rental income.

You are considered to use the property as a residence if your personal use is more than 14 days, or more than 10% of the total days it is rented to others, whichever is greater. For example, if you live in your vacation home for 18 days and rent it 160 days during the year, the property is considered used as a residence and your deductible rental expenses would be limited to the amount of rental income.

 

Special Rule for Limited Rental Use  If you use a vacation home as a residence and rent it for fewer than 15 days per year, you do not have to report any of the rental income. Schedule A, Itemized Deductions, may be used to report regularly deductible personal expenses, such as qualified mortgage interest, property taxes, and casualty losses.

 
Obama Promises to Sign Democrats' Middle-Class Tax  Cut Bill

 

In remarks at the White House on August 3, President Obama vowed to sign the Democrats' version of legislation that would extend Bush-era tax cuts to those earning $250,000 or below. The president called on GOP lawmakers to drop their resistance to passing a less-expensive version of legislation that would extend tax cuts passed in 2001 and 2003. "Let's keep taxes low for the 97 percent of small business owners and we can argue about the other 3 percent," the president said. "If Congress sends me a clean bill extending the tax cuts on the first $250,000 of every family's income, I will sign it right away."

 

Wealthier Americans do not need tax relief as much as working-class taxpayers who are struggling to find work while the economy recovers, the president said. He supports the Senate-passed Middle Class Tax Cut Bill, but said the nation cannot afford the GOP legislation approved by the House, the Job Protection and Recession Prevention Bill of 2012. GOP lawmakers have said the Democrats' bill would raises taxes on the very small businesses that create jobs for working Americans.

 

As always, C&L will keep you updated on this and any other law changes as they happen.
 

 
About C&L Tax and Accounting Services LLP
 
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