I've got a question regarding reporting rental income to the IRS. (rent, taxes)

[NYLooking]

Hello.

I'm not sure where to post this but I've got a rental/tax question.

Suppose I stay in my new vacation home for only seven days in 2015. I rent it out for 14 days in November 2015 for $500. I also rent it out in January 2016 for $2500. The renter pays me his rent in December 2015.

Does this mean that I will have $3000 that does not have to be reported to the IRS?

Thanks.

[jms493]

you must report all income...no?

[OhioToCO]

Publication 527 (2014), Residential Rental Property

[Thepreacherswife]

Individuals are usually on the cash basis of accounting, so you report income when you receive it, not when you earn it. If something goes bad and you wind up returning the advance rent, you should know by the time you file.

[Icemodeled]

Any income you get from rentals in 2015, you report for the 2015 taxes. So, if you recieve the $3k total in 2015 year then yes, its taxable that year.

[NYLooking]

Thanks for replies. I now understand what income has to be reported when.

But I'm still confused because I read an IRS publication that stated under certain conditions rental income does not have to be reported at all. Seems like it had to do with how long I would use the home in a given year.

[Thepreacherswife]

Originally Posted by NYLooking

Thanks for replies. I now understand what income has to be reported when.

But I'm still confused because I read an IRS publication that stated under certain conditions rental income does not have to be reported at all. Seems like it had to do with how long I would use the home in a given year.

Yes, there is a de minimis rule that says if you rent out your personal residence for less than 15 days in a calendar year. In that case, you don't report the income and you don't report the expenses either.

Tax Topics - Topic 415 Renting Residential and Vacation Property

There is a special rule if you use a dwelling unit as a personal residence and rent it for fewer than 15 days. In this case, do not report any of the rental income and do not deduct any expenses as rental expenses.

The special rule is codified in Section 280A(g) of the Internal Revenue Code:

(g) Special rule for certain rental use
Notwithstanding any other provision of this section or section 183, if a dwelling unit is used during the taxable year by the taxpayer as a residence and such dwelling unit is actually rented for less than 15 days during the taxable year, then—

(1) no deduction otherwise allowable under this chapter because of the rental use of such dwelling unit shall be allowed, and
(2) the income derived from such use for the taxable year shall not be included in the gross income of such taxpayer under section 61.