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john52
New Member

Personal use of property while available for rent

My wife and I bought a rental properly in another city in 2017. We traveled there to shop for it in October, closed escrow in November, and signed with a property management company a few days later. While the house was on the rental market in December, we drove there with our kids and stayed for four nights. We did maintenance for half of the time we were there and vacationed the rest of the time. No one rented the house until 2018. I know we can't deduct any expenses from our 2017 income, but we want to account for the passive losses to carry them over this year. One problem is that TurboTax doesn't want to count this as a rental because it was rented zero days in 2017. It just tells me to delete the property and then loops back to ask for details of the same property. Another question is how we account for our part vacation/part maintenance trip when counting personal days of use, since it was on the market the whole time. (The people who eventually rented it toured the house during our stay.) Finally, can we count our trip to shop for the house (which was all business, no vacation) as part of our expenses?

4 Replies
Coleen3
Intuit Alumni

Personal use of property while available for rent

Your property is officially a rental property at the time it is placed in service.

Placed in Service

You place property in service in a rental activity when it is ready and available for a specific use in that activity. Even if you aren’t using the property, it is in service when it is ready and available for its specific use. 

Example 2.

On April 6, you purchased a house to use as residential rental property. You made extensive repairs to the house and had it ready for rent on July 5. You began to advertise the house for rent in July and actually rented it beginning September 1. The house is considered placed in service in July when it was ready and available for rent. You can begin to depreciate the house in July.

From <https://www.irs.gov/publications/p527#en_US_2017_publink1000219036

No, the days used full-time for repairs and maintenance (even if a family member also used it at the same time for personal purposes) are NOT personal use days.

Here's some more info on personal use for rentals:

A day of personal use is any day, or part of a day, that your property was used by:

1) you for personal purposes

2) any other person for personal purposes, if that person owns part of the unit (unless rented to that person under a "shared equity" financing agreement)

3) anyone in your family or in the family of someone who owns part of the unit

4) anyone under an agreement that lets you use some other unit

5) anyone who pays less than a fair rental price for the unit

The following are NOT treated as personal use days:

* days a member of your family used the property as their main home and paid a fair rental price

* days used full-time for repairs and maintenance (even if a family member also used it at the same time for personal purposes)

* days you used the dwelling as your main home before (or after) renting it, if:

  1) the unit was rented 12 months or more or will be.

  2) the dwelling unit was not rented 12 months or more but was sold.

Coleen3
Intuit Alumni

Personal use of property while available for rent

You may have to trick the program by saying one rental day. Since it is based on income, this will not show on your return.
john52
New Member

Personal use of property while available for rent

Thanks for this tip. I think I need to enter the number of days it was on the market, not just one day. Otherwise it calculates the ratio of rental days to personal days wrong.
jrr93
Level 1

Personal use of property while available for rent

Is there a definitive answer on this point?  Are we supposed to enter the days rented (zero) or the days in service?  Ours was a similar situation. We moved out in Sep and put it "in service" but it didn't rent until 2018, so zero rental days, but we do have expenses to deduct.
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