Wow! I see you've got 16 posts here, and 15 of them deal with rental property. I figure you're either a first time landlord, or maybe it's just your first time doing your taxes yourself with TurboTax. That's okay though. It's not like we learn this stuff through osmosis. At least you're asking questions in an effort to avoid learning through what I refer to as "stupid tax". 🙂
With personal use days, the program figures it the way the IRS requires it to be figured. personal use days/365, and then the cost basis being used for depreciation is reduced by that percentage. Then it depreciates for that year only, based on that reduced cost-basis.
First, you need a clear definition of personal use days. (Which the program does not provide)
When you convert a personal use property such as your primary residence, 2nd home or vacation home, to rental property, the days before the conversion do not count for jack sqat. Not ever. So if you convert your primary residence to rental property on Dec 1 of the tax year and you do not live in it as your primary residence, 2nd home or vacation home for one single day for the remaining 31 days of the tax year, your personal use days are zero. Period. Then you percentage of business use is 100%. The business use is 100% even if the property sat empty for 30 days and you got the renter contract starting on Dec 31.
If you have a renter move out and the property sits empty for 2 months while you're advertising and getting another renter in, then your personal use days is still zero, provided you did not live in it for one single day as your primary residence, 2nd home or vacation home. Addtitionally, the vacant period counts for the days rented. So your days rented would be "the whole year", all 365 of them. Business use percentage is still 100% and days of personal use is zero.
Now lets say during that vacant 2 months period you had to drive 300 miles to the property in order to do the "turn around" and get it ready for the next tenant. Instead of getting a hotel or making that drive from home everyday, you stay in the house at night, because you are the one doing the work during the day to clean things up, paint, get the flower beds looking nice again, and performing a few minor repairs. So you're living in the house for two weeks. Guess what? Your personal use days is still ZERO. That's because of the "reason" you were there. You were not living in the house as your primary residence, 2nd home, and you definitely weren't on vacation. So your personal use days is still ZERO.
However, if in that same scenario you decide to bring the family with you so they can enjoy two weeks on the ski slopes while you do the work to get the property rent ready again, then that "is" personal use. So those days would be counted as personal use days.
Now, when you do have personal use days, the program will take care of the business use percentage for you. (At least, the desktop H&B version does for me.) The program will also adjust the depreciation if the number of personal use days warrant such an adjustment. From my testing, 5 days or less of personal use doesn't seem to change the depreciation for me. But then, I would expect that to depend on the cost basis that is being depreciated. The bigger the cost basis, the more days of personal use it would take to force the math to cause an adjustment.
