Aside from sun and fun, the summer months can bring valuable tax breaks that many are unaware of says Mark Watson, a partner in the Personal Financial Planning practice of KPMG Peat Marwick LLP. "Take your part-business, part-pleasure vacations, rent your yacht for up to two weeks, or employ a child in the family business for the summer and you may be eligible for substantial tax savings,'' says Watson.

Watson outlines three commonly overlooked tax saving opportunities are outlined below:

TRAVEL - Combine business with pleasure on a domestic trip and deduct. You may be able to deduct the travel costs to and from your destination, the cost of your hotel stay, and 50% of your meal expenses that are attributable to the days of your trip that are dedicated to business. However, non-business activities and the expenses of a non-business companion (e.g.; your spouse and/or children) are not deductible.

VACATION HOMES - Vacation homes, including boats and motor homes (that have a sleeping space, cooking facility and bathroom) can provide a tax break. If you use your vacation home as a residence and rent it out for less than 145 days per year, the rental income you receive is tax free, but no deductions attributable to such rental are allowable. If you use your vacation home as a residence and rent it out for 15 or more days during the year, you must include the rental income you receive in your gross income, but you also may be able to deduct some or all of the rental expenses against that rental income. Further, if you actively participate in the rental activity and your adjusted gross income does not exceed $100,000, you may also be able to deduct a net rental loss of up to $25,000 against your other income. Lastly, you may be eligible to claim a mortgage interest deduction for the interest you pay on a mortgage incurred to purchase a vacation home.

CHILDREN'S SUMMER JOBS - Employing minors in family business operations during summer months can also be a source of tax savings. If a family has its own business, it can hire a child for the summer, deduct the child's reasonable wages as a business expense and have the child pay tax on the wages at his/her own (hopefully lower) tax rate. Earned income is free of Social Security taxes when a child under the age of 18 is hired by a parent's unincorporated business. Children who work outside the family business are also eligible for tax savings. Minors with earned income can now open Roth IRAs and withdraw their own after-tax contributions penalty free and tax free. Earnings in the Roth IRA will grow tax free and qualified distributions from earnings will not be subject to income tax. Further, up to $4,250 of a child's earned income may be sheltered from income tax in 1998.

So get those kids answering the phone, putting up your signs for you and sending your faxes.

Watson advises individuals to speak to a financial planner to determine if they are eligible for these summertime tax breaks.

KPMG Peat Marwick LLP is the U.S. member firm of KPMG International, a leading professional services firm. In the U.S., KPMG partners and professionals provide a wide range of accounting, tax and consulting services. As one of the foremost providers of information-based value added services, KPMG serves clients with complex needs by capturing, managing, assessing and delivering information to create knowledge that will help maximize shareholder value. KPMG International has more than 6,500 partners and 85,300 professionals in 155 countries and $9 billion in annual revenues.