Updated October 21, 2026. Quick answer: Publication 527 is the IRS guide to renting out a house or vacation home, and the web edition is for 2025 returns. It covers rental income, deductible expenses, depreciation and the limits on rental losses. A dwelling unit counts as your home if your personal use is more than the greater of 14 days or 10% of the days it is rented.
Quick reference
| Item | As the IRS publication states it |
|---|---|
| Personal use days that make a dwelling unit a home (Chapter 5) | more than the greater of 14 days or 10% of rental days |
| Rented less than this many days, the rent is not income (Chapter 1) | 15 days |
| Special allowance for rental real estate losses (Passive Activity Limits) | up to $25,000 |
| MAGI at or below which the full allowance applies (Passive Activity Limits) | $100,000 |
| MAGI at or above which there is no special allowance (Passive Activity Limits) | $150,000 |
| Recovery period for residential rental property under GDS (Chapter 3 example) | 27.5 years |
| Net investment income tax rate (Reminders) | 3.8% |
What the publication covers
The introduction says “In most cases, all rental income must be reported on your tax return, but there are differences in the expenses you are allowed to deduct and in the way the rental activity is reported on your return.” The IRS page carries the cover line “For use in preparing 2025 Returns”.
The page also has a What’s New section for the 2025 edition, which is where the section 179 and bonus depreciation notes below come from.
Chapters in plain words
- “Chapter 1 discusses rental-for-profit activity in which there is no personal use of the property.”
- “Chapter 2 discusses depreciation as it applies to your rental real estate activity”.
- “Chapter 3 covers the reporting of your rental income and deductions, including casualties and thefts, limitations on losses, and claiming the correct amount of depreciation.”
- “Chapter 4 discusses special rental situations.”
- “Chapter 5 discusses the rules for rental income and expenses when there is also personal use of the dwelling unit, such as a vacation home.”
Tables and worksheets inside it
- Table 1-1, Examples of Improvements.
- Table 2-1, MACRS Recovery Periods for Property Used in Rental Activities.
- Tables 2-2a, 2-2b, 2-2c and 2-2d, the MACRS percentage tables.
- Worksheet 5-1, Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home.
On this site, Schedule E is where rental income and expenses are reported, Form 4562 goes with depreciation and Form 8582 goes with passive activity limits.
The figures that matter
On a vacation home, the publication says “You use a dwelling unit as a home during the tax year if you use it for personal purposes more than the greater of:” The two tests are “14 days, or” and “10% of the total days it is rented to others at a fair rental price.”
On short rentals, chapter 1 says “If you rent property that you also use as your home and you rent it less than 15 days during the tax year, don’t include the rent you receive in your income.”
On rental losses, the Passive Activity Limits part says “If you or your spouse actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your nonpassive income.”
It continues “If your MAGI is $100,000 or less ($50,000 or less if married filing separately), you can deduct your loss up to the amount specified above.” It also says “Generally, if your MAGI is $150,000 or more ($75,000 or more if you are married filing separately), there is no special allowance.”
On depreciation, an example in chapter 3 says “This means using the straight line method over a recovery period of 27.5 years.”
The Reminders section says “NIIT is a 3.8% tax on the lesser of net investment income or the excess of modified adjusted gross income (MAGI) over the threshold amount.”
The What’s New section says “For tax years beginning in 2025, the maximum section 179 expense deduction is $2,500,000.”
Where it points elsewhere
For a sale, the introduction says “For information on how to figure and report any gain or loss from the sale, exchange, or other disposition of your rental property, see Pub. 544.” For a main home that was also rented, it sends readers to Publication 523. On this site, net investment income tax and converting your home to a rental cover two related questions.
Where this comes from
The IRS page About Publication 527 opens with “Publication 527 discusses rental income and expenses (including depreciation) and explains how to report them on your return.” It links the PDF and eBook editions and the earlier revisions of the publication.
This page describes the web edition of Publication 527 (2025), Residential Rental Property, as served on irs.gov on October 21, 2026. The IRS can revise a publication after we read it, and the IRS page controls. General information, not tax or legal advice.
Common mistakes
- Counting a rented vacation weekend as rental use. The publication says “If a dwelling unit is used for personal purposes on a day it is rented at a fair rental price (discussed earlier), don’t count that day as a day of rental use in applying (2) above.”
- Reporting rent from a very short stay. The publication says “If you rent property that you also use as your home and you rent it less than 15 days during the tax year, don’t include the rent you receive in your income.”
- Assuming the $25,000 loss allowance applies at any income. The publication says “Generally, if your MAGI is $150,000 or more ($75,000 or more if you are married filing separately), there is no special allowance.”
- Depreciating the land along with the building. The publication says “You can’t depreciate the cost of land because land generally doesn’t wear out, become obsolete, or get used up.”
Related: IRS publications by number, Schedule E, Schedule E line 1, fair rental days, Form 4562, Form 8582, Net investment income tax, Converting your home to a rental, and Rental income in retirement.
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Answer againSources
- IRS, Publication 527 (2025), Residential Rental Property (irs.gov): https://www.irs.gov/publications/p527
- IRS, About Publication 527, Residential Rental Property (Including Rental of Vacation Homes) (irs.gov): https://www.irs.gov/forms-pubs/about-publication-527
Read from the IRS pages linked above on October 21, 2026. General information, not tax or legal advice. The IRS publication and the instructions for your own form control, and your own facts decide the outcome.