Question

Monty rented his home for 10 days for $11,000 to a corporation during the World Series. How much must he include in gross income? Explain.

Answer 1

Solution:-

How much must he include in gross income:-

0 (Zero)

Explanation:-

There is no tax impact for renting out their residence for 14 days or fewer:-

If they reside or stay at the property during the year and rent it out for 14 days or fewer, taxpayers do not have to report any rental income. There is no dollar limit on this 14-day exception, making this a significant exception for hosts who can capitalize on short-term events in their area like a World Series or presidential inauguration. For example, during South by Southwest, a resident in Austin, Texas may be able to rent out their property for higher than usual due to the demand for hotel rooms and rentals. If they only rent it out during the nine days of South by Southwest, their rental income is non-taxable and rental expenses are non-deductible.

However, the sharing platform may send them and the IRS an information document reporting this income. The IRS will want to know why the taxpayer isn’t including the income on their tax return. The taxpayer should maintain a record of the dates and rent charged to substantiate their exclusion.