If you are thinking about buying a vacation home and might want to rent it occasionally to help pay off some of the expenses and taxes, you need to know some rules. A "second home" is used as a personal residence and not a property that you would rent out on an ongoing basis, which would be an "investment property".
Interest on the mortgage is fully deductible on your second home just as interest is deductible on your first mortgage. There is a limit though of $1.1 million between the two mortgage amounts. Above that it is apparently not deductible.
Property taxes are also deductible just as on your first home.
The good news is that you can rent your second home for up to and including 14 days without making it an investment property. And you do not even have to declare the rental income on your taxes. You may also deduct property taxes just as above too.
You can find out more about these rules and the rules that pertain to investment properties at www.Kiplinger.com or you can print out a simple summary on these tax rules at www.MtnProps.com.
If you do want to rent your vacation home for more than 14 days, things become very tricky. You need to consult a CPA. You might want to start with some research at www.irs.gov.
Interest is discussed at: http://www.irs.gov/taxtopics/tc505.html
Taxes are discussed at: http://www.irs.gov/taxtopics/tc503.html
Start your search for a second home/investment property located in Summit County, Colorado by logging in here: www.GetYourSummitHomes.com. Lots of good bargains now.