wastebook2014

WASTEBOOK 20144450One provision in the tax code allows the gamerich and famous to rent out their property forshort periods of time without reporting therevenue on their tax returns. This may seem inconsequential,but the celebs that rent out theirdigs for thousands per day sure appreciate it.Under IRS rules, income received for shorttermrentals total less than 15 days per year istax-free. Even a second home or a vacationproperty can be rented out, as long as the totalstay per year is less than 15 days. 658 There is nolimit on the total income that can be excluded,nor is there any prohibition against high earners.The result is a potential bonanza for rentalsaround major sporting events, and about $10million in federal revenue is lost each year to theloophole. 659At Super Bowl XLVIII, held in EastRutherford, New Jersey earlier this year, askingrates for studios, apartments, and houses frequentlyran into thousands of dollars per night.Just a few weeks before football’s greatestJonas Bonus: Rich and Famous Rent OutTheir Pads Tax Free$10 millionof the year, the average rental close to thestadium cost $1,600 a night, though many wentfor much more. 660One three bedroom home advertised for$5,000 per night, boasting, “You won’t finda more perfect location for your New YorkSuperbowl trip than this handsomely decorated3 bedroom home in Secaucus.” 661 And theselandlords won’t find a better deal, making severalthousand dollars tax free.One young enterprising football fan, rentedthree of his bedrooms for $2,000 per night,more than enough to cover his $5,600 rent andutilities bill that month. “There’s no need to staythere if we can make up a month’s rent,” he tolda local reporter. 662During last year’s Super Bowl, one superstarscored a touchdown renting his property,avoiding tax penalties. Kevin Jonas rented hismansion out for $20,000 per night for 12 nights(just under the limit). 663 Complete with “a walkoutbasement, a billiard room, and home theatercomplete with stadium seating and a 3-Dprojector…a 6,500-bottle wine cellar and theproperty’s in-ground saltwater pool,” the rentalscheme could have brought in $240,000 taxfree,adding to his estimated net worth of $18664 665million.Kevin Jonas was not the only celebrity tobenefit from the IRS’s generosity. An NFL playereven put his two-bedroom apartment up forrent on Craigslist. 666 He was asking $9,000 forthe week to supplement his $450,000 salary. 667668Jonas’ home was also not the only one inthe $100,000-plus club either. Another homeadvertised for $119,500 for “Super Bowl WeekOnly.” 669Major events that homeowners take advantageof are not limited just to the SuperBowl. PGA Tour tournaments, the South bySouthwest music festival in Austin, Texas, andNCAA college basketball games have all beenmagnets for these types of tax-free loopholes. 670