Owning a home and leaving it vacant during a 13-week travel nursing contract feels like wasted money. Many travel nurses consider renting out their primary dwelling on platforms like Airbnb, Vrbo, or through medium-term tenant leases to generate rental income while on assignment.
While generating rental cash flow is appealing, renting out your primary residence can inadvertently dismantle your tax home under federal tax law.
Why renting your entire home destroys your tax home
Under IRS Revenue Ruling 73-529, a taxpayer maintains a tax home only if they have a permanent residence available for their immediate personal occupancy, where they incur substantial ongoing living costs.
If you sign a lease renting your entire house to tenants for the duration of your travel contract, you legally surrender possession and access to the property. You cannot return home between shifts or during contract gaps because tenants occupy the premises.
The IRS views a fully rented property as a business investment rather than a personal dwelling. Without a personal home available for your continuous use, you become an itinerant worker, rendering all subsequent travel stipends fully taxable.
Check whether your current housing arrangement protects your tax status with our Tax Home Quiz.
Renting a spare room vs renting the whole house
If you want to generate rental income from your property without sacrificing your tax home, renting out a portion of the property while retaining dedicated personal living space is an effective solution.
If you own a three-bedroom home, you can rent two bedrooms to roommates or tenants while keeping one bedroom exclusively for your personal use and maintaining access to common areas.
In this scenario, your home remains continuously available for your immediate occupancy whenever you return from assignment, preserving your primary residence under federal tax standards.
Review residential rental property guidelines in IRS Publication 527.
Reporting rental income on Schedule E
Any rental income you receive from tenants or roommates must be reported on federal Form 1040 Schedule E.
When renting out part of your home, you must divide expenses such as mortgage interest, property taxes, homeowner insurance, and utilities between personal use and rental use based on square footage. You can deduct the rental portion of those expenses against your rental income.
Calculate your potential net earnings from travel nursing assignments with our Contract Analyzer.
Frequently asked questions
Does renting out my house while on assignment destroy my tax home?
Yes. Renting your entire home surrenders your right to immediate personal occupancy, turning you into an itinerant worker without a legal tax home.
Can I rent out spare bedrooms while preserving my primary residence?
Yes. Keeping a dedicated bedroom for personal use while renting spare rooms allows you to return home at any time, preserving your tax home under IRS rules.
How do I report rental income on Form 1040 Schedule E?
Report rental income and deduct prorated expenses (mortgage interest, property taxes, utilities) based on the square footage allocated to tenants.