Second home question

[lolo9fo]

My daughter lives in our second property rent free and it is her primary residence. She lives with her boyfriend and we do not charge them any rent. It is less than 20 miles from our primary residence. Does this house qualify as being a second home since our daughter lives there? If so, are we able to qualify for the solar tax credit deduction if we purchase solar for the property?

[Carl]

While it does qualify as a 2nd home, you can't claim the tax credit unfortunately. See https://www.irs.gov/credits-deductions/residential-clean-energy-credit under the section "Who Qualifies?" The second paragraph states, "You can't claim the credit if you're a landlord or other property owner who doesn't live in the home."

It further states, "You may be able to claim a credit for certain improvements made to a second home located in the United States that you live in part-time and don't rent to others."

Being that you can't be living in it part-time if someone else is living in it full time, You would not qualify for the credit.

[Opus 17]

Yes, it is a second home for most tax purposes.  You can treat it as a personal residence and letting family live there is personal use.  

However, to claim the solar credit, you must live there as your home at least part of the year.  It doesn't have to be your main home, but it must be a home you use as a home.

On the other hand, your daughter could claim the credit if she pays for the solar system.  To claim the solar credit, you must install the system on a home you live in, but you don't actually have to own it.