Many owners — whose inauguration rentals has been posted on Wil’s Domain — are stymied by potential tax liabilities. Contrary to popular belief, there is no need to worry.
In Washington D.C., the Office of Tax and Revenue has opted not to impose a sales tax on owners of inauguration rentals who are offering their properties for rent to out-of-towners who are coming to the District of Columbia area for the inauguration of President-elect Barack Obama, the outgoing junior Senator of Illinois.
Inauguration rentals owners are rejoicing over the news, during a time when the nation is enduring one of the worst financial crisis in decades. Usually the city imposes a 14.5 percent sales tax on a property that has been rented out 90 days or less; however, city officials have opted to suspend imposing a tax on any rental property during the historical inaugural for the nation’s first African-American U.S. President.
What about reporting requirements?
The Office of Tax and Revenue has issued a statement each property owner are still obligated to report any earnings on his or her city and federal income tax filings.
Regarding your keeping records for the Internal Revenue Service, relax. The IRS will not impose a tax bill on any vacation rentals which is rented out 14 days or less within any calendar year. In fact, Inaugural rental property owners are not even required to report the income on property that is rented out 14 days or less. Also, property owners aren’t allowed to deduct any expenses pertaining to the rental property.
For more information, inaugural rental property owners in the Washington D.C. area should contact the Office of Tax and Revenue at 1-202-727-4TAX (4829) and/or the visit the Internal Revenue Service’s Web site at www.irs.gov or call the IRS’s TeleTax line at 1-800-829-4477.
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