Quick Answer
Rental income from a shore house in Belmar, Asbury Park, Long Branch, Sea Girt, Spring Lake or Manasquan is generally taxable on your federal and New Jersey returns. You can usually deduct expenses tied to renting, and short term rentals may also carry New Jersey sales and occupancy taxes that are collected from guests.
The 14 day rule
If you rent a home you also use for fewer than 15 days in a year, federal law generally lets you leave that rental income off your return. Rent it longer and the income is reportable, with expenses split between personal and rental use.
Deductible expenses
- Mortgage interest and property taxes (rental share)
- Insurance, repairs and cleaning
- Management and platform fees
- Utilities paid for guests
- Depreciation of the building, not the land
Short term rental taxes
New Jersey applies sales tax and occupancy fees to many short term transient rentals, and some towns add their own occupancy tax. Booking platforms often collect these for you, but not always. Check your platform statements and your town's rules.
Selling later
Depreciation you claimed (or could have claimed) affects your gain when you sell. Keep records of improvements from day one.
General information only. Local rules vary by town.
Keep reading
Questions about your own situation? Book an appointment with the My Tax Fella team.