| The Tax Benefits of Purchasing a Vacation Home | | | | To qualify as a vacation home, the home must |
| in Montana | | | | be occupied by: |
| There is no doubt that the United States is filled | | | | 1. You or any other person who has an interest in |
| with incredible opportunities for purchasing second | | | | it. |
| or vacation homes. Localities such as South Lake | | | | 2. A member of your family or of a family of any |
| Tahoe, Myrtle Beach, Daytona Beach and | | | | other person who has an interest in it, unless the |
| Asheville are among the most popular and | | | | family member uses it as his or her main home |
| desirable places to retire or visit. However, new | | | | and pays a fair rental price; |
| information is being brought into the light that | | | | 3. Anyone under an agreement that lets you use |
| could point to substantially better buying, selling | | | | some other dwelling unit; or |
| and living conditions in Montana. | | | | 4. Anyone at less than fair rental price. (Source: |
| Experience the Beauty of Montana Year Round | | | | Internal Revenue Service, 2010) |
| Montana's ability to showcase year round splendor | | | | Other Incentives to Purchasing a Vacation Home |
| of four seasons and its proximity to outdoor | | | | Although the tax breaks can be an excellent |
| sports and activities makes it one of the most up | | | | incentive to purchasing a vacation home, it should |
| and coming vacation/retirement destinations in the | | | | not be the deciding factor. Location, amenities, and |
| US. Even within a few short miles of the major | | | | accessibility are the defining factors of a great |
| cities such as Helena, Billings or Bozeman residents | | | | vacation property. |
| find the blend of exclusion and proximity they | | | | Montana has a state population of under 1 million |
| need with Montana mountain ranch land. This blend | | | | people but has over 123 different airports to fly in |
| is exactly what makes Montana such a desirable | | | | to, making it one of the most accessible regions |
| location to purchase a vacation home. Even | | | | of the country. Along with properties that blend |
| homes in Montana's "big cities" are only a short | | | | 'proximity to' and 'seclusion from' every major |
| drive to skiing, fishing or the seclusion of a high | | | | city in Montana, you can get away from your |
| mountain lake. | | | | normal routine without sacrificing the modern |
| Tax Benefits and Tax Laws Associated with | | | | luxuries that you've grown accustomed to. |
| Vacation Homes | | | | For those that have not considered the value of a |
| If you are in the market for a second home, you | | | | Montana home in the mountains, consider the fact |
| should be aware of your options as a tax payer. | | | | that Montana is one of the top destinations for |
| Your second home will be subject to one of a | | | | winter sports, showcasing attractions such as the |
| small handful of tax laws, depending on how often | | | | Big Sky ski resort, Whitefish Mountain Resort, |
| you use it or rent it out. | | | | Bridger Bowl, Red Lodge or Turner Mountain. |
| The IRS allows second/vacation home owners to | | | | Along with access to millions of skiing acres, |
| make certain deductions in their taxes from their | | | | Montana also offers opportunities for summer |
| annual tax return including interest, taxes, casualty | | | | activities such as ranching, hunting, fishing, |
| losses, maintenance, utilities, insurance and | | | | trapping, horseback riding and so much more. |
| depreciation. The U.S Tax Code allows individuals | | | | Montana offers activities for vacation home |
| to deduct up to $1 million in mortgage interest on | | | | owners 365 days a year. |
| two homes. The rules are complicated but | | | | Your vacation home should be a dream |
| generally, to qualify as a second home by the IRS | | | | indulgement as well as an investment and while |
| you must use the rental home at least 14 days | | | | the tax incentives can be a deciding factor in |
| of the tax year or ten percent of the time that it | | | | whether you purchas a second home or not, just |
| was rented to other people at a fair price. | | | | remember that a great vacation home is more |
| Other criteria include stipulations regarding how | | | | than just tax incentives; it is a place that you and |
| often you or a renter is present on the property. | | | | your family will cherish for generations to come. |