Wring Tax Cash From Your Vacation Home

(The technical rule is ridiculous: It says that if you personally used your vacation home for fewer than the greater of 15 days or 10% of the days it was rented out, it is not considered a residence. Huh?)

Basically, if you don't fall under the first scenario, your home is probably a rental property. That means your deductions are no longer limited to your rental income, so the sky's the limit. However, they still must be allocated between your personal and rental use so the appropriate portion must still go on your Schedule A. The upside is that the piece that's allocated to your rental income can be unlimited.

Big note: now that it's a rental property, you can't deduct your mortgage interest on Schedule A any more. That's because it's not a second home for you and your family -- it's an investment property.

And one more big tip: "If you are going to rent any of your homes for more than 14 days, just be sure to keep good records of both your rental and personal-use pattern, and the expenses you incur," Scharin advises.

April is a long way off, so get your documentation now. And then, if Uncle Sam ever comes knockin', you have backup.

So enjoy your beach house. Rent it out and make some money. Just be sure to change the sheets between visits.

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