Just like the ocean every day, the economic tide is changing. Between the real estate markets, which have strengthened in areas across the country, and favorable interest rates, the idea of owning a vacation home is becoming a reality for many families. There are many tax advantages to owning a vacation home; however first you must determine if your vacation home will be treated as a residence or as a rental property.
Philadelphians are counting down to the 2015 World Meeting of Families, where Pope Francis will make his first visit to the area. This two-day papal visit will bring a record number of visitors into the city and surrounding areas. The latest estimate exceeds 2,000,000 people! The preparations are extensive; so much so that new legislation has been introduced that may impact you if you are thinking about renting your home to travelers.
Recently, in Chief Counsel Advice (CCA) 201428008, the IRS ruled that suspended passive activity losses (PAL) under Code Section 469 from the passive rental of a home formerly used as the taxpayer's principal residence, did not offset gain excluded under Code Section 121 on the property's sale.
