I moved into my rental property during renovation of my primary - did I convert??

Forum|Forum|4 years ago
February 22, 2022
2 replies
35 views

I own a rental property and a primary residence. My rental property was rented for all of 2020 thru June of 2021. I started a renovation of my primary residence and moved into my rental property in Sept, 2021. The renovation is taking longer than expected, and I will be in my rental property until approx May of 2021. Do I treat this as converting my rental property into a second home or some other approach to dealing with this situation.

Not A Product Question

ThomasM125

Level 15

The rental property would not be considered your primary residence, if that is what you mean, since you are only there temporarily. You would treat your time there as personal use of the property, however. That means you cannot deduct rental expenses on the rental property for the time that you are living in it. Also, because of the amount of time you are living there, you will not be able to deduct rental expenses to the extent they are more than your rental income. You can take as personal itemized deductions the mortgage interest and property tax on the rental property applicable to the time you are living there.

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Carl

Level 11

If you intend to rent the property out again after you return to your primary residence, there's no need to convert the property to personal use. You can leave it classified as a rental.

Basically, you will be asked for "days rented" in 2021, as well as "days of personal use" in 2021. enter the numbers accordingly. The personal use days will have a direct impact on the amount of depreciation you are allowed for the tax year, as well as the amount of rental expenses you can deduct. So don't be shocked or surprised when you enter $5000 of rental expenses, but less than half of that is actually deducted.