Rental property for personal use - deduction clarification

I have a vacation rental property - used 16 days for personal use and 65 days rented out.  The instructions say I can't deduct expenses for personal use.  Does that mean my deductions such as utilities, taxes, and so forth have to be prorated at 65/(16+65) = 80% of those expenses I can deduct?  

MinhT1
Expert Alumni

Investors & landlords

Yes, you can only deduct the rental portion of expenses. You generally must divide your total expenses between the rental use and the personal use based on the number of days used for each purpose.

 

Please read this IRS document for more information.

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Investors & landlords

so does Turbotax do that for you?  For depreciation you have to input the percentage of time used for a business.  So it's doing that math for you.  But the other expenses I would have to do that math and only input (in my case) 80% of my actual expenses correct?  I also read that if I use it for personal use for more than 14 days a year and rent it more than 15 days that my allowable deductions is limited to my gains.  Is that correct?  In my case I have a net loss than I would have a $0 on my K-1.  But turbotax put down a large loss on my K-1.   thanks for your time.    

MinhT1
Expert Alumni

Investors & landlords

For the other expenses such as utilities, you'll have to do the calculations and enter the rental use portion.

 

As you use the dwelling as a residence more than the greater of 14 days and 10% of the time you rented it to others at fair market value, then you are considered as using the dwelling as a residence, and you cannot deduct more than the gross rent. Any excess can be used in the year you have excess income or when you sell the property.

 

 

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Investors & landlords

ok, so this all matches and I get that Turbotax is not doing the allocation for me.  But I just filled out all the forms for my llc with turbotax business and I inputted 16 days of personal use and 65 days for rental use.  But turbotax still gave me a 2,000 loss on my K-1.  Instead of making it zero and allowing me to defer it to next year.  what do I do?  

MinhT1
Expert Alumni

Investors & landlords

I suggest that in the return of the LLC you manually limit the rental expenses to the gross income so as to have a 0 result. And make a note of the expenses you have deferred.

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