Important Tax Information for Buying a Vacation Home on Lake Nacimiento

As a Lake Nacimiento Real Estate agent, I’ll often work with buyers who are interested in renting out their vacation home on Lake Nacimiento when they’re not using it.  It sounds like a simple and smart solution for those who enjoy owning their own place and who want to spend their vacation time on Lake Nacimiento, but would like to offset the costs and make sure the home stays in use while they’re away.

While it can be a fairly simple process, there are a few things buyers are unaware of that they’ll want to know before jumping in to being a landlord.  Of course there is the aspect of marketing the home, as well as hiring a professional cleaner to take care of cleaning the home in between vacationers.  But oftentimes buyers don’t factor in the various taxes when using their vacation home as a rental property and a personal vacation destination.

I thought it would be helpful to give you a quick rundown of some of the basic tax points you’ll want to know and discuss with your Lake Nacimiento Real Estate agent.

– If you live in your Oak Shores or Heritage Ranch home for a portion of the year and rent it out the other part of the year; you’ll have to divide your expenses based on the number of days for each use.

– Personal use means any time you, or someone else who does not pay rent, is using the Lake Nacimiento home.  In fact, if you rent the property out for less than 15 days a year, you don’t need to report any rental income.  Consequently, while your rental income is tax free, you won’t be able to claim any rental expenses.

– If you use your home more than 14 days, or more than 10% of the days it’s rented out; your home is considered a “vacation home used as a residence.” That means, if you have a net loss (if your expenses exceed your income), you can’t use the excess expense to offset the income from other courses.  You have to carry your loss to the next year to be treated as rental expenses.

– If you’re using your Lake Nacimiento vacation home for less than 15 days, or no more than 10% of the days it’s rented, it’s viewed as a “vacation home used as a rental property.”  You’ll need to report and pay taxes on the income less your rental expenses.  However, losses come under complicated passive and hobby loss rules and you’ll want to consult with a professional.

I hope this is helpful as you consider your options for buying a home on Lake Nacimiento!  Whether you’re hoping to buy one of the homes currently on the Lake Nacimiento Real Estate market to rent out or not; I’d love to help you find your home!

There are many great homes in Oak Shores and Heritage Ranch from which to choose, so feel free to contact me today to get started!

Grace Borzini
Your Local Lake Nacimiento Real Estate Expert
Oak Shores Realty

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Oak Shores Realty specializes in Oak Shores at Lake Nacimiento properties. Please contact us today to get more information on Lake Nacimiento lake homes. Oak Shores Realty can also provide you an insiders “Lake Nacimiento Buying Guide” with great information including maps and market information.

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