As we review current tax law for late year changes we will be doing a series of blog posts to remind taxpayers that there are a few income sources which might impact your personal tax situation which remain completely tax-free to you (although some are reportable but not taxable)
How many people have heard about an urban legend in the tax code called “The Masters Exemption”? (think Augusta, GA) The good news is this legend is true! Situations where your property (primary or vacation home) is rented for 14 or fewer days is completely tax-free to the taxpayer (without any depreciation or maintainance deductions though) regardless of the amount! Between the hot film industry in Georgia, combined with major sporting and music events these opportunities provide a major possible windfall to the homeowner.
Please note that the title of the blog post only mentions the IRS unfortunately. Generally any short-term rental has state and local tax obligations and state governements continue to use better techonology to track these types of rentals.
Just a reminder these are rentals of your primary home or second/vacation home not considered an investment property
Next blog post we will talk about when selling your primary residence will result in a zero federal tax bill.