Morton S. Winer, C.P.A.

9933 NORTH LAWLER AVENUE, SKOKIE, ILLINOIS 60077-3703

Phone: 847-676-8900


Website: www.msw-cap.com

June 2018

June 2018 Client Profile

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Brandon and Anne just bought their dream vacation home, which they intend to use a few weeks annually before making it their fulltime home in retirement. After last year’s tax changes, they wonder if they can deduct mortgage interest and real estate taxes.


Probably, but there are new limits. Recent tax law changes cap the tax deduction on interest for primary and secondary homes to mortgages totaling no more than $750,000. Another complicating factor is a $10,000 annual cap on all state and local taxes – income, sales, real estate, and personal property taxes. If you keep two homes and work, there’s a good chance you’ll exceed the caps.


One way around these caps is to use the vacation home as a rental property, in which case most of these expenses are deductible without the caps. However, you could only use the rental property fewer than 14 days or 10% of the total days you rent it to others annually at a fair rental price.


Personal use includes days family and friends use the home at less than fair market value. Talk to your tax professional to learn more.


Client Profile is based on a hypothetical situation. The solutions discussed here may or may not be appropriate for you.


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