Question

If a residence is rented for fewer than 15 days in a year, it is treated as a personal residence. The rent income is excluded from gross income, and mortgage interest and real estate taxes are allowed as itemized deductions, as with any personal residence. True or false?

Answer 1

The statement is true; rent income from a residence rented for fewer than 15 days a year is excluded from gross income, and mortgage interest and real estate taxes are deductible as they are with any personal residence.

Step-by-step explanation:

The statement provided in the question is true. When a residence is rented for fewer than 15 days during a year, it is indeed treated as a personal residence for tax purposes. This means that the rent income earned from such limited rental use is not included in the homeowner's gross income.

Hence, this rental income becomes tax-exempt, providing some tax relief to the taxpayer. Furthermore, even though the home is being rented out for a short period, the homeowner can still deduct mortgage interest and real estate taxes as they would with a personal residence not used for rental purposes.