Pub 527 states: "Any day that the unit is rented at a fair rental price is a day of rental use even if you used the unit for personal purposes that day."
Fact pattern (hypothetical)
- 2-year lease Jan 1 2021 - Dec 31 2022 at a fair rental price
- Tenant pays rent at the start of each quarter: Jan 1, Apr 1, Jul 1, Oct 1
- Tenant vacates on Aug 1 2021
- Tenant agrees to forfeit the advance rent paid for Aug and Sept and to pay an additional 1 month of rent (Oct) to be released from the rest of the lease.
- Owner occupies the property in mid-August through the end of the year and leases it to a new tenant at a fair price effective 1/1/22.
Since personal use exceeds 14 days, the property was "used as a home". HOWEVER, the tenant paid rent for August and September, so these are not personal use days by the definition established in Pub 527. As the tenant paid a 1-month break fee, is October also considered rental days not personal use days?
Thanks!
