A second home used purely for personal vacations is not a business deduction. However, mortgage interest on a second home is deductible if you itemize (up to the $750,000 combined mortgage limit). Property taxes are deductible up to $10,000 (SALT cap). If you rent the property out for more than 14 days per year, it becomes a rental property subject to Schedule E rules. The Augusta Rule (IRC §280A) allows you to rent your home to your own business for up to 14 days tax-free.
Getting the deduction right is not just about whether it is allowed — it is about how you set it up.
Consider the Augusta Rule: rent your primary or secondary home to your business for up to 14 days per year and receive the rental income tax-free.
When structured correctly, this deduction can significantly reduce your taxable income.
Here is how this deduction typically works in real situations:
Key Takeaway: The difference between a valid deduction and a denied one usually comes down to documentation, usage percentage, and proper structuring. The same expense can be fully deductible, partially deductible, or not deductible at all — depending on how it is handled.
Not directly. But if you rent it out, expenses proportional to rental use are deductible on Schedule E. Mortgage interest and property taxes may also be deductible if you itemize.
The Augusta Rule (IRC §280A) allows you to rent your home to your own business for up to 14 days per year and receive the rental income completely tax-free. The business can then deduct the rental payment as a meeting or retreat expense.
Yes, if you itemize deductions. Mortgage interest on a second home is deductible on Schedule A, subject to the $750,000 combined mortgage limit for loans originated after Dec 15, 2017.
Click your profession to see all the write-offs that apply to your full tax profile.
