Husband and I are purchasing vacation home in Florida. Is it better from a tax position to get the loan as a vacation home, second home or investment? We don’t want to incur ordinary income tax.
Helen,
If you purchase the home as a vacation home you will be able to write off the taxes and interest. If you purchase the home as an investment property you will be able to write off the depreciation. I think you would get a better tax savings as well as a better rate from the second home option.
Not to mention the rates will be a heck of a lot better as a 2nd home.