Vacation Home for Business Lodging

Take a trip to your vacation home while creating deductions using your vacation home for business lodging.

Here’s good news: the properly used business vacation home or condo does not suffer from

  • the vacation-home rules,
  • the passive-loss rules, or
  • the entertainment-facility rules

In the days of COVID-19, you may have solid reasons to use your vacation home or condo for two purposes only:

  • personal pleasure, and
  • business lodging

Learn how to limit use to the two purposes above creates good tax results with no tax complications.

How Business Use Escapes the Dreaded Vacation-Home Rules
Do you use your business vacation home or condo solely for business lodging?

If so, you escape the vacation-home rules and may deduct your business-lodging costs. The law is very clear on this. The vacation-home section of the tax law, Section 280A(f)(f), state that nothing in the vacation-home rules shall disallow any business deduction for business travel.

Example – You use your beach home for overnight business lodging 37 times during the year. You have no personal or rental use of the beach home. Your beach home is a 100 percent business asset and deductible as such.

One exception to this business-lodging rule. The law does not grant the business-lodging exception to landlords who rent dwelling units. If you have apartment buildings or other residential rentals, staying at your vacation home or condo to look after your rentals does not let you escape the unfavorable vacation-home rules.

Your use of a vacation home or condo for only business and personal purposes creates a straightforward deduction for the business-use percentage with few complications.

This is for information purposes only…Always consult your Tax Professional and/or CPA for professional guidance and confirmation of information.

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