Questions regarding Rental Property

[brianinmaine]

Hello

I am hoping someone can assist me with a few questions regarding rental property.  We own 2 weeks of a timeshare.  They are fixed weeks every year.  One is during Thanksgiving and the other is in February.  We pay a maintenance fee for each week we own.  They are at the same property but different guest houses.  We pay a maintenance fee for each week we own of around $1100 each week.

Last year we used the week during Thanksgiving but we rented the week in February.  I did receive a 1099-MISC from the timeshare and I have a few questions about how I enter this in my taxes.

1. I assume for Property Description, I can just put timeshare, correct?

2. It asks "what type of rental is this" do I select the option "vacation or short-term (used for personal purposes and rented for short-term periods"?  Or do I select Other and enter Timeshare?

3. On the "Do any of these situations apply to this property" I am not sure what to select there.  I had rented it years ago but don't ever recall getting a 1099-MISC.  Do I select 2024 was the first year I rented the property? Do I select I converted this property from personal use to rental in 2024?  Both?  Or do I select non of the above? (as an FYI this year 2025 we rented the february week for 2 nights only and used it for the other 5 nights)

4. I assume I select that the "Property was not rented all year" seeing as we don't own the full year.?

5. seeing as we own a week in 2 different units, when it asks how many days we rented it I assume we put 7 and do we put 7 days used for personal use?  Or because it is a different unit, do we put 0 days of personal use?

6. For Property Ownership do we select that we do NOT own 100%?

7. Do I put $1100 under cleaning and maintenance for the 1 week or can we put 2200 because we own 2 weeks (even though we only rented 1)

Thank you

[DianeW777]

Below are the answers to your questions.  Keep in mind there is no depreciation because you own space but not a unit or building.

1. Yes, you can call it Timeshare and maybe add  the city (Timeshare-City) where it occurred.
2. You would select 'vacation or short term rental'
3. Select both on the screen 'Do any of these situations apply?'
4. Yes, select it was not rented all year
5. Yes you will enter the days rented and the days of personal use 7/7 (you have two weeks of timeshare regardless of location)
6. Select you do not own the property
7. Enter the 2200 since TurboTax should split the expenses based on total days and rental days

Things to consider:

The IRS says that if you rent out your house for 14 days or fewer during the year, you don't have to report the rental income on your tax return. However, that rule would treat your timeshare as a vacation home only if you personally use it for at least 15 days during the year in addition to the days it is rented.

If you don't meet both 15-day rules, the income is taxable. This means that you must own a timeshare a minimum of three weeks at a single resort, with at least 15 days used personally. This will be reported as rental Income on Schedule E. Deductions allowed include annual maintenance fee, advertising, rental commission, property taxes (if you pay them separately from the maintenance fees) and interest on your timeshare.

• IRS Publication 527

[lglennmusic]

What percentage do you enter when asked about timeshare ownership? I own 1 week per year

[DianeW777]

It depends. However the following may be beneficial in your situation due to the limited time you can rent it. If you meet the rule below there is no rental income to report.

The following rules may apply for with the IRS Minimal Rental Use rule.

• Minimal rental use: There's a special rule if you use a dwelling unit as a residence and rent it for fewer than 15 days. In this case, don't report any of the rental income and don't deduct any expenses as rental expenses.

@lglennmusic 

[lglennmusic]

I don't use it as a residence. I rented it for only 6 days. What bucket does that put me in?

[DawnC]

If you rented it only for six days, you don't have to report the income.   The rule is It doesn't matter whether you earn $100 or $10,000 during those 14 days that you rent out space—you don't have to report the earnings on your taxes.  However, to qualify, you must:

• live in the house yourself for more than 14 days during the year or at least 10% of the time that you rent it to others.  If you rented it 6 days, ten percent of that is less than one day, so you can qualify to exclude the income.  Just keep the documents with your tax records.   @lglennmusic 

[lglennmusic]

Thanks so much. The rule was a little confusing.

I do have another question. If someone only owes $36 in taxes, do they have to pay, or can it be deferred?

[SusanY1]

If someone owes $36 in taxes, they do need to pay.  If it isn't paid the balance will accrue interest and penalties.  

[lglennmusic]

I figured as much, but wanted to double check. Thanks!