Vacation Homes After Tax Reform: Rental vs. Personal Property, Maximizing Expenses, Conversions, Personal Use

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

Conducted on Tuesday, July 16, 2019

Recorded event now available

or call 1-800-926-7926
Course Materials

This course will present tax advisers with a thorough look at the tax implications of buying and renting vacation properties. Understanding how to maximize deductions for vacation homes, selling strategies and the impact of tax reform on these properties can make them worthy investments. Our panel of experts will explain how to optimize the tax benefits of vacation home ownership.


Vacation homes provide a getaway for owners--with rental income or appreciation as a bonus. The tax rules covering these second homes are complicated. Renting the property less than 14 days can provide tax-free income. Personal use of more than 14 days or 10% of the dates rented subjects the vacation home to limitations on expense deductions. Expense deductions are limited to rental income with excess expenses carried forward.

For these homes, tax preparers must consider whether to use the IRS or the court method for allocating expenses and the new SALT limitations. With less than 10% personal use the property might qualify as a rental. For a taxpayer with other passive income or AGI less than $150,000, a rental property classification could provide a tax deduction.

These second homes sales are subject to the rule of "heads you lose, tails the IRS wins." Gains are subject to tax; losses are not deductible. At the same time, gains of $500,000 and $250,000 from the sale of a personal residence are excludable by married and single taxpayers respectively. Converting a vacation home to a personal residence can generate significant tax savings.

Listen as our panel of experts provides insights into classifying vacation homes, converting these homes to residences, and allocating expenses to maximize tax deductions. The classification of these getaways is critical to deduct current expenses, minimize rental income, exclude gains on sales and recognize losses.



  1. Classifications of vacation property
    1. Rental
    2. Mixed-use
  2. The effects of tax reform on vacation homes
  3. Selling a vacation home
  4. Converting a vacation home to a personal residence
  5. Strategies for keeping it in the family


The panel will review these and other important issues:

  • Differences between rental properties and vacation homes
  • The impact of tax reform on vacation homes
  • Strategies to maximize expense deductions on vacation homes
  • When and how to convert vacation homes to rental property
  • Selling strategies to minimize gains


Camargo, Nicolas
Nicolas Camargo

Senior Attorney
Foster Swift Collins & Smith

As a former prosecuting attorney, Mr. Camargo has established himself as an accomplished litigator with over 14 years...  |  Read More

Capdevielle, Cliff
Cliff Capdevielle

Managing Attorney

Mr. Capdevielle has been developing sophisticated tax planning strategies and resolving tax disputes for clients more...  |  Read More

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CPE credit is not available on downloads.