Tower Plaza Condominium

 

TAX EFFECT FOR CONDOMINIUM OWNERS

The tax effect of a purchase of a single family home or a condominium can vary considerably based upon the actual use the of the property. The table below reflects a summary of these effects.

POTENTIAL USE

• Owner Occupied. Property purchased for the taxpayers own use and residence

• Vacation or Second Home. A property purchased for the use as a vacation home or second residence for the owner or their family. The second home can be one of two types:

  a) a home that is only used for personal use,

  b) a home that is used a portion of the year as a rental property subject to the following limitations: Personal use is limited to 14 days OR 10% of the total number of days the home is rented at fair market rental. If a second home is both personal and rental (over 14 days or 10%) , then the taxpayer must divide all expenses on the basis of the proportion of owner use days to rental days/total combined days used.

• Rental Property. This is property that will be rented in an arms length transaction at a fair market rental. It is normally felt that rental to a family member qualifies if the rental is based upon an arms length transaction.

 South View of Michgan Stadium

SUMMARY

This information is intended as a simple guide to possible tax benefits. This information is subject to periodic review and change and is not guaranteed accurate. To find out how these benefits might apply to you, please consult your accountant or attorney.

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