The Masters; Super Bowl week; Marathon weekend.
What do all of these events have in common? They are all top events that draw a lot of spectators to an area. They also demand high occupancy rates at hotels and/or condos. They also last less than 15 days. Why does that matter and why is an accountant mentioning it?
“In most cases, you must include in your gross income all amounts you receive as rent. Rental income is any payment you receive for the use or occupation of property.”
When an IRS publication starts this way, there generally isn’t much hope. Typically, the exceptions to this rule are extremely uncommon and don’t necessarily apply to many people. So why do I bring this up? Because it may apply to more people than you would think, especially this year, in this area.
On February 2nd, 2014, a very rare event is occurring. The Super Bowl is coming to the Meadowlands in East Rutherford, NJ. While the Super Bowl is played every year, it rarely, if ever, is played outdoors in the northern part of the country for fear of the weather conditions. The biggest game of the NFL season is typically played either outdoors in a tropical climate (think Florida or Arizona) or indoors wherever the league wants. This way the weather never comes into play and no team has an advantage.
Publication 527, the one quoted above, goes on to state that “If you rent property that you also use as your home and you rent it less than 15 days during the tax year, do not include the rent you receive in your income…” This means that people with homes in Augusta, GA can rent them for a pretty substantial premium during the Masters golf tournament and not have to report that income; people in Super Bowl town – this year NYC, Hoboken, etc. – can offer up their home and not have to report the income received.
This could be a very lucrative opportunity if you don’t mind a minor inconvenience.