Tips and definitions: Vacation home purchase scenario
The extra tax refund is the additional refund you get
from the IRS due to owning this property. It is determined by:
Note that if you are making a profit (if your net rental income is greater
then your non-rental interest & taxes), the taxes you pay on this profit are shown.
- computing your non-rental mortgage interest & property taxes
(that is, the interest and taxes due to using
the house as a second home).
your net rental income from this non-rental mortgage interest
& property taxes
- multiplying this difference by your marginal tax rate