Your personal use days are ZERO. The screen is asking you the number of days you lived in the property as your primary residence or 2nd home *while the property was classified as a rental*. What you used the property before prior to converting it to a rental does not matter, and counts for nothing.
Also, your business use percentage is 100% (one hundred percent). The program is asking what percentage of time you used the property for business, during the time it was classified as rental property. What you used the property for prior to converting it to a rental, does not count for anything.
Being that I get the impression you are a first time landlord, I hope you find the below useful, helpful and educational. It will also help you avoid many common errors that first time landlords make. It is EXTREMELY IMPORTANT that your numbers be absitively positutely spot on PERFECT the first year. If they are off even slightly, such errors have the possibility of becoming exponentially bigger as years pass. Then when you catch the error down the road, the cost of fixing it (in the form of back taxes, underpayment penalties and fines) can be quite $costly$. So if unsure, then by all means, please ask.
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Rental Property Dates & Numbers That Matter.
Date of Conversion
- If this was your primary residence before, then this date is
the day AFTER you moved out.
In Service Date - This is the date a renter "could" have moved
in. Usually, this date is the day you put the FOR RENT sign in the front yard.
Number of days Rented - the day count for this starts from the first day
a renter "could" have moved in. That should be your "in
service" date if you were asked for that. vacant periods between renters
count also PROVIDED you did not live in the house for one single day during
said period of vacancy.
Days of Personal Use - This number will be a big fat ZERO. Read
the screen. It's asking for the number of days you lived in the property AFTER
you converted it to a rental. I seriously doubt (though it is possible) that
you lived in the house (or space, if renting a part of your home) as your
primary residence or 2nd home, after you converted it to a rental.
Business Use Percentage. 100%. I'll put that in words so there's no
doubt I didn't make a typo here. One Hundred Percent. After you
converted this property or space to rental use, it was one hundred percent
business use. What you used it for prior to the date of conversion doesn't
count.
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RENTAL POPERTY ASSETS,
MAINTENANCE/CLEANING/REPAIRS DEFINED
Property Improvement.
Property improvements
are expenses you incur that add value to the property. Expenses for this are
entered in the Assets/Depreciation section and depreciated over time. Property
improvements can be done at any time after your initial purchase of the
property. It does not matter if it was your residence or a rental at the time
of the improvement. It still adds value to the property.
To be classified as a
property improvement, two criteria must be met:
1) The improvement
must become "a material part of" the property. For example,
remodeling the bathroom, new cabinets or appliances in the kitchen. New carpet.
Replacing that old Central Air unit.
2) The improvement
must add "real" value to the property. In other words, when the property is appraised by a qualified,
certified, licensed property appraiser, he will appraise it at a higher value,
than he would have without the improvements.
Cleaning & Maintenance
Those expenses
incurred to maintain the rental property and it's assets in the useable
condition the property and/or asset was designed and intended for. Routine
cleaning and maintenance expenses are only deductible if they are incurred
while the property is classified as a rental. Cleaning and maintenance expenses
incurred in the process of preparing the property for rent are not deductible.
Repair
Those expenses
incurred to return the property or it's assets to the same useable condition
they were in, prior to the event that caused the property or asset to be
unusable. Repair expenses incurred are only deductible if incurred while the
property is classified as a rental. Repair costs incurred in the process of
preparing the property for rent are not deductible.
Additional clarifications: Painting a room does not qualify as a
property improvement. While the paint does become “a material part of” the
property, from the perspective of a property appraiser, it doesn’t add “real
value” to the property.
However, when you do
something like convert the garage into a 3rd bedroom for example,
making a 2 bedroom house into a 3
bedroom house adds “real value”. Of course, when you convert the garage to a
bedroom, you’re going to paint it. But you will include the cost of painting as
a part of the property improvement – not an expense separate from it.
