It depends. If this rental condo was either converted from personal use to rental use or is a short term or vacation rental makes a difference on how you report the income. Also, if you rented it at fair rental value (FRV) or made it available for rent at FRV makes a difference.
- If you converted it from personal to rental use and for FRV then on the day of conversion it is 100% rental the rest of the year.
- Say 'Yes' to the question 'Was rental condo rented every single day in 2024. You will be asked for the date placed in service.
- If it was a short term or vacation rental then you should not answer 'Yes' and your deductions will be limited based on days and/or square feet if it's situated on your home property.
- If you did not indicate that you 'actively participated' in the operations of the rental condo, your expenses will be limited.
- Active participation means you decide who manages the property, pay for repairs, made decisions about repairs. etc. This is in the 'Rental Property Info' section.
- Lastly, there is a rule for rental real estate when it comes to losses on the property if your income is above a certain amount.
- Phaseout Rule: The maximum special allowance of $25,000 ($12,500 for married individuals filing separate returns and living apart at all times during the year) is reduced by 50% of the amount of your modified adjusted gross income that’s more than $100,000 ($50,000 if you’re married filing separately). If your modified adjusted gross income is $150,000 or more ($75,000 or more if you’re married filing separately), you generally can’t use the special allowance. This is because the special allowance is reduced to $0 since the modified adjusted gross income is over the $100,000 amount.
Review your answers to the questions and update here if you have more questions and we will help.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
