Converting Vacation Condo to Primary Residence

[monksealman]

This year we retired and moved to our vacation condo permanently.  We bought the condo in 2016 and have been renting it out when we have not been there on vacation.  We stopped renting it 5/31/2022.  It was rented for 142 out of 151 days available in 2022.  We travelled to the condo in June 22 to prep it for our move (cleaning, inventory, damage evaluation, etc.).  We moved on 8/2/2022. 

I'm trying to determine where to allocate the various expenses (mortgage interest, property taxes, etc.) and where to input them.  I now the rental expenses (maintenance, etc.) will go on schedule E.  For example do I split the mortgage interest and property tax as part of the rental expenses in schedule E, or do I input it all into the 1098 deduction, or do I split them?  If I split them, how do I allocate them?

Also, can I claim the trip expenses in June for converting the condo from rental to our primary residence?

[PattiF · Accepted solution]

You would split the mortgage interest and property tax between the time the condo was rented and personal use period. Your personal use of the condo began on 6/1/2022 when it was no longer available to be rented even though you did not begin living in the condo until 8/2/2022. The mortgage interest and property taxes applied to the rental are 151/365 of the total costs. The rest will be included in your Schedule A.

The trip expenses cannot be included on the rental return as the condo was no longer available to rent when the trip was made on June 22. Only mileage for trips to the condo when it was an active rental can be included.

[monksealman]

Thanks for the clarifications!