Vacation Home to Tax Haven

Welcome to the club. You either have a second home or would like to buy one.

Wouldn't it be nice to have your own retreat or, better yet, one that saves you real cash at tax time?

Now, just to review, the IRS lets you treat vacation homes in one of three ways, depending on how often you use them personally.

In a nutshell, you can set up your property as a rental, as primarily for personal use, or somewhere in between.

The details are pretty complicated, but you'll get the idea from what I'm about to explain.

The interesting thing is that it works best to go to one extreme or the other -- make your vacation home either a pure rental or purely personal.

Click here for the video version of this story from Jennifer Openshaw.