Seasonal rental Dec 25th to April 25th, rent paid in full at end of December

danielgelfand · ‎December 27, 2019

Currently deployed to middle East since October 2019. Renting my home for 4 months from December 25th to April 25th. The rent for entire time is being paid in December. Technically the house is only being rented for 7 days in 2019 but I am most likely going to have constructive possession of the entire 4 month rental income. Pub 527 says:

Advance rent. Advance rent is any amount you receive before the period that it covers. Include advance rent in your rental income in the year you receive it regardless of the period covered or the method of accounting you use. BUT then it goes on to say this........

Rental of property also used as your home. If you rent property that you also use as your home and you rent it less than 15 days during the tax year, don’t include the rent you receive in your income and don’t deduct rental expenses. However, you can deduct on Schedule A (Form 1040), Itemized Deductions, the interest, taxes, and casualty and theft losses that are allowed for non rental property. See chapter 5, Personal Use of Dwelling Unit (Including Vacation Home).

Can someone please shed some light on this?

My email is [email address removed]

Anonymous_ · ‎December 28, 2019

Technically, per Section 280A(g), you would not include the income from the seven days of rental use in 2019 in your gross income and you would also not be allowed a deduction for the seven days of rental use in 2019 (i.e., you would not prepare a Schedule E for 2019 for the 2019 rental use).

It would be actually be wise if you could somehow secure separate payment for 2019 and 2020 because there might be a mismatch if you exclude income allocable to 2019 but receive a tax reporting statement for the entire amount your renter paid.

danielgelfand · ‎December 29, 2019

Thank you for the information. I am not going to be able to collect rent for 2019 and 2020. Lease is signed and all money due up front. Still unclear how to handle it. And IRS website gives contradictory information.