The Olympic Game for Second Homeowners

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World-class sporting events like the Winter Olympic Games (currently underway in Vancouver, in case you've been asleep for the last week) and this summer's FIFA World Cup in South Africa, can turn destination homeowners into short-term landlords.

However, it's not quite as easy as hanging out a For Rent sign and waiting for the dollars to roll in. As with all matters, Uncle Sam has a few things to say about it - even if your property isn't located in the United States.

U.S. residents lucky enough to own second homes (abroad or domestically) are perfectly allowed to dabble in the rental game - as long as they follow a few rules.

Read the I.R.S. fine print, or let the Philadelphia Inquirer bottom-line it for you: "Owners can pocket any fair-market rent as long as the term is 15 days or fewer and they don't claim any of the tax deductions typically allowed on rental property, such as for depreciation or maintenance."

This exclusion only applies to properties that are treated as second homes, not those that are considered rental or investment properties. Those properties are subject to a different set of regulations, the defining one being that the owner cannot personally occupy the property for more than 10 percent of the total days that it's rented per year. Failure to limit their personal use to 10 percent would turn the property back into (you guessed it) a second home, subject to the no-more-than-15-day rental restriction.

Its can be a complicated game, but with a little savvy it can also be a goldmine for second home-owners (provided that demand keeps up with supply). With slope-side homes at the Whistler, B.C. Olympic venue renting for around $2,500 U.S. dollars per night, "fair-market" is definitely a relative term.
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