Another reason I love real estate: If you rent your vacation home LESS than 15 days in a year, you do not have to claim the rental income. Of course, you cannot claim the rental expenses either.
So what does this mean to a vacation homeowner whose business is incorporated? If your corporation utilizes your second home for board meetings, employee conferences, etc., you can charge your corporation rent for the use. Make sure it’s a REASONABLE amount by getting quotes from local hotels for their boardroom use. Also make sure it’s truly a business use and that you provide documentation as such.
As long as you rent the home LESS than 15 days in the tax year, you do not have to claim the rental income that you collected from your corporation. However, your corporation will be expensing the rent that it paid you for the business use of the property.
Did I ever tell you how much I love real estate?