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Because a VR is considered an active investment, rather than a passive one like conventional rentals, there is no limit to the VR loss that can offset ordinary income. Even with conventional rentals you can deduct up to $25,000 against OI, so why on earth wouldn't you depreciate?

Word of caution...this should state that a VR can be considered an active investment, but you have to pass the's not automatic. There doesn't seem to be much that's automatic when it comes to taxes and vacation rentals. Much of how a VR is treated tax wise depends on the level of personal use and level of personal participation. Lots of "if this than that" in the tax rules rather than one size fits all.

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