Question on primary vs Second home

[swapd29]

Hi,

I had a question regarding my home property. I owned and resided in Property A for 10 months of the year (Jan-Oct 2021) and bought and moved to Property B from Nov-Dec 2021. I rented out my property A for 2 months in 2021 and hence wanted to know should i claim Property B my current residence as primary home or Property A where i resided most of the year 2021 but rented last 2 months as second home instead of rental?
Also i got 2 months rent from a renter for Property A. Any help would be greatly appreciated. 

-SD

[Mike9241]

factors to consider:

your place of employment or distance to it old vs nrew

where family members live - that includes you and since you are renting A, I would say B

address currently used for such things as tax returns, driver's license, voting, bills and correspondence, auto registration - this would probably be B 

nearest to your banks (?)

is the move to B permanent for the foreseeable future (ie as of now no intent to return to A)

the actual tern used is principal not primary 

since A was rented more than 14 days, the rent is reportable on schedule E. expenses must be prorated

depreciation must be taken ( use the lower of your cost or FMV when you started to rent it).

[rolaidz]

I have almost the exact same scenario as this post, and I don't think there was an answer in the reply.  Would identifying the properties for mortgage tax deduction, Turbo tax wants you to identify the property before entering it for each.  So Property A was lived in for most of the year in 2021 before moving out and buying Property B.  Property A then rented out for a couple months, and Property B becomes primary residence.  In this scenario, how do we identify each property?  Is property A a "Primary Home" - it certainly was in 2021 until the end of year when Property B was purchased, and so is Property B also a "Primary Home" or a "Second Home"?  There's also a third option for "Other" which is described as "rentals you don't live in...."

Thanks in advance.

[LeonardS]

From your post, it appears that the answer for Property A would be "Other" and Property B would be your primary home.  Generally when answering questions when you have 2 homes use their status on the last day of the year.

[Carl]

@swapd29 

Property A ceased being your primary residence:

 - At the earliest, the day after you moved out.

 - At the latest, the day the renter moved in.

Property B became your primary residence the date you moved in.

All rental income will be reported on SCH E of your 2021 tax return.

Assuming you are a first time landlord, the below information will help clarify things that the program does not clarify very well.

Rental Property Dates & Numbers That Matter.

Date of Conversion - If this was your primary residence or 2^nd home before, then this date is the day AFTER you moved out, or the date you decided to lease the property – whichever is later.
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 was contracted to move in, and/or "could" have moved in. That would be your "in service" date or after if you were asked for that. Vacant periods between renters do not count for actual days rented. Please see IRS Publication927 page 17 at https://www.irs.gov/pub/irs-pdf/p527.pdf#en_US_2020_publink1000219175 Read the “Example” in the third column.
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, 2nd home, or any other personal use reasons 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.