Fair rental day calculation for cleaning days

[catonfenz]

We have a beach house that is available for rent throughout the year with a property management company but also is subject to occasional personal use.  When the house is rented by a third party, the management service blocks the night before the arrival day and the night of the day of departure, to conduct cleaning.  Should these "blocked" nights be included in the fair rental day calculation?  I could argue that the renter is effectively "paying" for those nights with their rent because others can't rent during that period.  Thanks.

[Carl]

We have a beach house that is available for rent throughout the year

So the property is available for rent "the whole year". Period.

is subject to occasional personal use.

Doesn't change the above per-se.  It's just that when asked for personal use days, those days include the days the property is not available for rent.

Example: You instruct the property manager to not rent it from July 1 through July 7th. because "you" want it for july 3rd, 4th and 5th. You arrive on the morning on July 3rd and depart on the evening of July 5th. You have 3 days of personal use, and  358 days of rental use.

Take note that "days rented" has no effect on anything. But "days of personal use" does have an effect on just about everything.

[catonfenz]

Thank you for the reply.  TurboTax however is asking specifically about the number of fair rental days.  Are you saying you would use a value of 365 minus the number of personal use days? 

[Carl]

Yes, you could do that. Technically speaking, the period of time between renters when the property is vacant, does not change the fact the property is still business property. Assuming the property was classified as a rental for every single day of the tax year, so long as the days rented and days of personal use do not exceed 365 when added together, you're fine.

Now lets consider that the property was vacant for a month between renters and that you did not use it for personal use during that vacant period. Technically that would mean it was rented for 330 days with no personal use days. That does not change the fact the property was classified as a rental for the entire 365 days of the year, and will have no effect on your deductible rental expenses. They're all still 100% deductible.

But lets say you utilized the property the property for personal use for 15 of those 30 days it was vacant. Those personal use days will have an effect on the total amount of claimed expenses that can be deducted. You'd still report 100% of the rental expenses incurred for the tax year. But with 15 days of personal use those expenses that would actually be deductible on the SCH E would be reduced proportionally; approximately by 4%.

[tagteam]

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@catonfenz wrote:

Thank you for the reply.  TurboTax however is asking specifically about the number of fair rental days.  Are you saying you would use a value of 365 minus the number of personal use days? 

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The instructions are rather specific:

For each property listed on line 1a, report the number of days in the year each property was rented at fair rental value and the number of days of personal use.

See https://www.irs.gov/instructions/i1040se#idm140048554541104