Vacation homes come with unique tax rules that many property owners misunderstand. From the Augusta Rule and mixed-use limitations to depreciation, short-term rental loopholes, and bonus depreciation strategies, knowing how the IRS classifies your property can dramatically impact your deductions, tax liability, and long-term profitability.

Rental property tax rules can be confusing, especially when deductions, depreciation, passive activity limits, repairs, improvements, and short-term rental rules all overlap. This guide breaks down key rental property tax issues so owners can protect deductions, avoid reporting mistakes, and structure their investments with greater confidence.