Rental property

3 replies
31 views

I have a rental which i have allowed my son and grandson residence for minimal rent

my son has been ill this year and no rent has been paid. I am concerned how this will affect IRS

the property has shown a loss every year so far.

Ask the Experts - Extension - Sept 2023

Anonymous_

Level 15

Every day you rent below fair rental is considered to be a day of personal use per Section 280A.

As a result, your deductions would be limited to mortgage interest and property taxes (both on Schedule A, subject to limitations).

lp71Author

Level 2

Personal use?

I own another home nearby which my permanment residence

i was curious if this is a red flag and if I should consider another option or if I am fine continuing with rental until he is on his feet again.

Anonymous_

Level 15

@lp71 wrote:

Personal use?

Yes. See https://www.law.cornell.edu/uscode/text/26/280A

(2) Personal use of unit

For purposes of this section, the taxpayer shall be deemed to have used a dwelling unit for personal purposes for a day if, for any part of such day, the unit is used—

(A)

for personal purposes by the taxpayer or any other person who has an interest in such unit, or by any member of the family (as defined in section 267(c)(4)) of the taxpayer or such other person;

(B)

by any individual who uses the unit under an arrangement which enables the taxpayer to use some other dwelling unit (whether or not a rental is charged for the use of such other unit); or

(C)

by any individual (other than an employee with respect to whose use section 119 applies), unless for such day the dwelling unit is rented for a rental which, under the facts and circumstances, is fair rental.