topic Vacation Rental Property and Personal Use in Investors & landlords

Vacation Rental Property and Personal Use

rileysp — Thu, 13 Feb 2025 16:13:16 GMT

My vacation rental is available 10 months per year and 2 months it is used for personal use. When I entered the personal use days the following categories do not allow the expenses:

Insurance

Utility

Cleaning Services

Maint

Supplies

Depreciation

I understand the prorating of expenses, but I do not understand why the expenses are illimated. The only way to show these expense is if I enter 0 personal days. Please let me know what the rule is for these expenses.

Thank you.

Re: Vacation Rental Property and Personal Use

M-MTax — Thu, 13 Feb 2025 16:19:07 GMT

Most likely because you're also using the property as a "residence" (per Section 280A) and, therefore, your expenses cannot reduce your total rental income below $0 (i.e., you cannot show a loss).

Re: Vacation Rental Property and Personal Use

rileysp — Thu, 13 Feb 2025 17:28:14 GMT

I have a full time residence that I do not rent, however, we use the vacation rental for personal use 2 months out of the year. Does this disqualify most of my expenses because of the 2 months?

Re: Vacation Rental Property and Personal Use

M-MTax — Thu, 13 Feb 2025 17:40:28 GMT

@rileysp wrote:
I have a full time residence that I do not rent, however, we use the vacation rental for personal use 2 months out of the year. Does this disqualify most of my expenses because of the 2 months?

If personal use is 60 days (2 months) out of the year, then the maximum number of days the property could be used for rental purposes is 305 days.

60 days of personal use (that you have) is more than the greater of 14 days or 10% of rental use days and, as a result, the rental is treated as a "residence" for the purposes of Section 280A and your deductions are limited.

Read through the Section since it applies directly to your scenario.

(d) Use as residence

(1) In general

For purposes of this section, a taxpayer uses a dwelling unit during the taxable year as a residence if he uses such unit (or portion thereof) for personal purposes for a number of days which exceeds the greater of—

(A) 14 days, or

(B) 10 percent of the number of days during such year for which such unit is rented at a fair rental.

For purposes of subparagraph (B), a unit shall not be treated as rented at a fair rental for any day for which it is used for personal purposes.