Can I Exclude Rental Income from a Vacation Home?

Yes — under the 14-day rule (sometimes called the "Master's Exception" because of Augusta, GA homeowners), if you rent your home for 14 or fewer days per year, the rental income is completely excluded from your taxable income and doesn't need to be reported. You also cannot deduct any rental-related expenses, but your mortgage interest and property taxes are still deductible on Schedule A. If you rent for more than 14 days, all rental income is taxable and you must allocate expenses between personal and rental use. This exclusion is particularly valuable for homeowners in high-demand areas during events like the Super Bowl, Final Four, or major golf tournaments.