It's Best to Report the Income, Then Exclude It
In general, this allows you to rent out your home for 14 days or less during the year without owing federal tax on the income. You don't even have to r...eport it to the IRS.
If you receive a 1099 for the rental income received, I recommend listing the rental income on Schedule E, line 3, and then deducting it back out on Schedule E, line 19, with the explanation 'income from a dwelling unit used as a home and rented less than 15 days.' "
That procedure "will avoid any confusion if the IRS is looking at your return and trying to match the 1099s to your tax return,"
Warning: The tax rules on rental income and expenses can be nightmarishly complex. See IRS Publication 527.If you need any type of tax services give us a call. We have 2 enrolled agents who are licensed in all 50 states.