Till recent times, people aimed to buy cars and televisions as luxury items. But as the years went by, they began to expand their investment to real estate and even buying second homes. Buying vacation homes in Las Vegas would make good investment properties, provided you proceed with caution. The tax rules for owning vacation homes have changed over the years. For example, the rule of 2010 says that if you own a primary home and a secondary home, you can actually rent out the secondary home for a maximum of two weeks without reporting its income.
A second home is always considered an investment property if you plan to rent it for longer times, and that is the only flip side of it. Despite that, having a vacation home would be greatly advantageous if you have it in a coveted location. Resorts and cabins are in great demand and you would be able to make good money through such investment properties.
Paying the tax for investment properties
The tax that you have to pay for your primary home maybe a bit soft when compared to the tax paid for vacation homes. IRS does have a gray spot for vacation homes. If you have happen to incur loss with the property then it will be considered passive loss and met along the lines with other passive investment (like a private partnership that you operate actively).
Eligibility for IRS deduction
Once you sell the vacation home, the passive losses that you have incurred will get carried over. And you are eligible for deduction if you: (1) earn less than$100,000 as your adjusted gross income (AGI) and (2) act as a property manager for your property.There will not be any tax break if the adjusted gross income is $150,000 or more. And you qualify for half deduction if the AGI is between $100,000 and $150,000. On the other hand, if you are planning to become a property manager then you will need to prove it to the IRS that you can juggle a full time job and that of a property manager as well. If you are renting out the property then you are eligible for home improvement cost. However, for this rule to be considered, you must not have lived in the vacation home for more than 14 days.
Buying investment properties in Las Vegas requires careful judgment and proper advice from an experienced Realtor. You can get in touch with Kamran to make your investment a profitable one.