When does an investment become a second home?

When does an investment become a second home?

Answer: If you lived in the condo half the year and no longer rented it, it would be a second home. You could deduct any mortgage interest and real estate taxes paid on the condo as part of your itemized deductions. You should maintain the depreciation schedule for your records because when you sell the property, depreciation factors can reduce your cost basis.

When you sell a rental property at a loss, you can deduct the loss. When you sell a second home, the loss is considered personal and is not deductible. In both cases, a gain on the sale would be taxable. – Paula Taylor

Source: The Orlando Sentinel (Orlando, Fla.); Paula Taylor, CFP, contributes to the Orlando Sentinel's Ask an Expert series. Distributed by Tribune Content Agency, LLC.

Thinking about purchasing an investment property? Reach out to Stateland Brown. Stateland Brown is a Real Estate company located in Boca Raton, FL. www.statelandbrown.com; 561-245-8722

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