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tediesel
Level 1

Condo not rented but held for investment. What is deductible, conflicting advice

Getting contradictory advice on this situation.  Condo is occupied by family member but NOT rented.  Still, Condo is held as investment for appreciation.  Some say it is SECOND HOME with tax and Mortgage interest deductible on Sched A.  Other advice is that it is SECOND HOME AND INVESTMENT so depreciation and mileage expense (activity in enterprise for profit) may be deducted also on Sched A, investment expenses.
 
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tagteam
Level 15

Condo not rented but held for investment. What is deductible, conflicting advice

It would be treated as a second home with the facts you presented (with mortgage interest and real estate taxes deductible on Schedule A, subject to limitations).

 

Do an internet search for Section 280A of the Internal Revenue Code. 

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3 Replies
tagteam
Level 15

Condo not rented but held for investment. What is deductible, conflicting advice

It would be treated as a second home with the facts you presented (with mortgage interest and real estate taxes deductible on Schedule A, subject to limitations).

 

Do an internet search for Section 280A of the Internal Revenue Code. 

View solution in original post

Carl
Level 15

Condo not rented but held for investment. What is deductible, conflicting advice

If anybody lives in the property rent free for even one single night, it's a second home.

tagteam
Level 15

Condo not rented but held for investment. What is deductible, conflicting advice


@Carl wrote:

If anybody lives in the property rent free for even one single night, it's a second home.


That depends. Per Section 280A(d):

 

(d) Use as residence

 

(1) In general For purposes of this section, a taxpayer uses a dwelling unit during the taxable year as a residence if he uses such unit (or portion thereof) for personal purposes for a number of days which exceeds the greater of—

(A) 14 days, or
(B) 10 percent of the number of days during such year for which such unit is rented at a fair rental.
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