My husband, Tim, and I regularly head up north to visit my family. We usually bivouac at one of my brother’s homes, but that’s not possible when the whole clan is in town. On those grand occasions, several of us will rent a house together, which gives us space to spread out and relax, a kitchen to work in, and the fun of being together as opposed to sitting alone in separate motel rooms.
Something that’s surprised me in our experiences with short-term rentals is how many Michigan homeowners periodically rent out either their primary residence or their vacation home. If you’re one of those enterprising homeowners, here are a few basic rules to keep in mind:
If you want to deduct rental expenses, you must separate them from personal expenses. Rental expenses will generally be deductible; personal expenses, rarely.
If you occupy the home for personal use for 15 days or more per year, you must report all of the rental income, and you can deduct rental expenses up to the amount of rental income.
You can increase your days of “personal use” by allowing a charitable organization to use the home or by renting it out for less than a fair rental price.
If you rent out the home for fewer than 15 days a year, you do not have to report the income, but neither can you deduct the rental expenses.