The Internal Revenue Service announced increased scrutiny of vacation home rentals, warning that income from short-term stays arranged through platforms like Airbnb and Vrbo must be properly reported. Homeowners who casually rent out their vacation properties - even for a few weekends - could face surprise tax liability if they fail to follow IRS rules.

The agency says rental activity will be a priority enforcement area in 2025 as more taxpayers turn to vacation home rentals for extra income. The distinction between personal use and rental use is key: once a property is rented beyond certain limits, the IRS requires that income be reported and, in many cases, taxes paid on the profits.

By answering a few simple questions, taxpayers can find out if they’re eligible for the IRS Fresh Start

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