What are the tax diffferences between rental property and second home

Can be a great Many. This is Definitely a question for your CPA and the answer will be based on Your Specific situation.

Property taxes or income taxes? Property taxes vary based on the occupancy, you can check with the county or city on the difference. Ask your tax advisor about income tax differences.

the differences are vast, and to see how they would benefit you for your particular scenario, you're better off consulting an account who works with property investors... But here are just a few benefits.. Rental properties allow you to depreciate the acquisition cost over 27.5 years, and if your a full time real estate investor (40 hours per week), then you can write off all your repairs and improvements in the year you pay them.. otherwise, you write off those expenses when the property is sold.. interest expense can be written off each year as well, but you will have to claim the rental income on a schedule E.. if you sell the home within the first 18 months, any gains will be considered ordinary income, however if you have the asset greater than 18 months and you sell, you will get the lower capital gains rate... These are some of the main benefits of rental properties.. As far as a 2nd home, any property you live in for 2 of the last 5 years and you sell, your first $250K (single), $500 (married) in gains will be tax free.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

A second home is one where the homeowner utilizes the property part of the year for personal use, in addition to their primary residence. An investment property is purchased or used in order to generate income, profit from appreciation, or to take advantage of certain tax benefits. The biggest difference you will find is in financing. A second home will see a slight increase in interest financing. Figure around 1%, above published rates, for a primary or owner occupied. Investment properties usually require more money down and the rents need to cover the monthly mortgage by 125% (as a general rule of thumb) in order to cover TDS (Total Debt Service), for that investment property not to affect your other purchase or refinance capability in the future. If you have any further mortgage questions, feel free to contact me 7 days a week at 800 315 8803. Jamie Lynne, www.bartprequalifies.com, lending since 1989, 800 315 8803 - 7 days a week.

We are a bunch of loan officers answering questions here... I'd suggest you consult a CPA. But when it comes to financing... second homes only need 10% down, while rentals need 20%.

with a second home, you can only claim the deduction for the mortgage interest and the real estate taxes on your schedule A "itemized deduction" . While rental property would be reported on your Schedule E with either profit or loss after deducting all other expenses. if you need more information about schedule E, take a minute and read the last article I wrote here. If you have any other question or more further information, feel free to ask me