| Interest on a mortgage of a second home is deductible | | | | home the rest of the time. It is also considered |
| from your taxable income if the mortgage is used to | | | | residence if you or any family members uses it for |
| buy, build or substantially improve the second home. A | | | | most of 14 days, or 10% of the time you rent it out. |
| condominium unit, house, mobile home, boat, | | | | The expenses may not be deductible, but the taxes |
| cooperative or house trailer that has cooking, sleeping | | | | and interest are. |
| and toilet facilities is considered a home. | | | | If you rent it out more than 15 days a year, the income |
| The deduction can be used only if you itemize, but the | | | | derived must be reported. However, the expenses of |
| amount may be limited if the loan surpasses the fair | | | | renting including depreciation, interest and taxes may |
| market value of the home itself, or if the combined | | | | be deductible up to a limit. Excess expenses not |
| loans of your main and second home exceed $1 million | | | | charged may be carried over in the succeeding year. |
| (half if filing separately). | | | | Selling your second home means you get taxed on |
| The interest of a home equity loan or line of credit is | | | | capital gains, long-term if you owned the home more |
| also fully deductible except when the indebtedness is | | | | than a year, short-term if not. Loss on the sale is not |
| over the fair market value of the home less the | | | | deductible. But if the home was for rent, profit is |
| existing mortgage. | | | | taxable as capital gains and loss is deductible. The |
| You don't need to report income on a second home | | | | portion of the profit attributed to depreciation is taxable |
| rented for less than 15 days a year, and used as | | | | at 25% maximum. |