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It isn’t often that the Internal Revenue Service says that income of any kind doesn’t have to be reported, but for clients who rent out their primary or vacation homes, that may be the case.

The IRS instructs those who rent out their homes for 14 days or less in a year not to report that rent money as income.

“There is a special rule if you use a dwelling as a personal residence and rent it for fewer than 15 days. In this case, do not report any of the income and do not deduct any expenses as rental income expense,” according to the IRS website under Topic 415.

“It’s sort of a loophole, but it can be big if you happen to live in a venue where there is some big event like the Super Bowl where you can rent out your home for thousands of dollars a week to families or groups,” says Rob Stephens, a co-founder at Avalara MyLodge tax services in Greenwood Village, Colo.

The trick is to make sure not to rent for more than 14 days, he says.

Go over by even one day and the IRS requires that all rent received be reported as income, Stephens says.

And then things get complicated because expenses for the same property need to be calculated and allocated based on the number of days a house was rental property and the number of days it was a home.

“It doesn’t matter how much the rent is for those two weeks,” Stephens says.

“It could be a $1 million and the IRS still doesn’t require you to report it as income,” he says. “But if it’s 15 days, you have to report it all.”

Mark Luscombe, principal analyst at the tax and accounting group of Wolters Kluwer in Riverwoods, Ill., suggests that depending upon the state, there could be state and/or local taxes that might need to be paid.

“Some states, like Pennsylvania and New York, have you start with the federal adjusted gross income figure,” he says. “If they do that and then there is no specific adjustment for rental income, you wouldn’t have to pay state tax either.”

Philadelphians may have recently made out well with this loophole.

According to HomeAway, an online vacation home leasing firm, short-term home rentals ahead of Pope Francis’ short visit to the City of Brotherly Love were running at an average of $1,690 per night, tax-free.

Dave Lindorff spent five years as a China correspondent for Businessweek and has written for The Nation and Salon.com.

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