Rental Property Condo allowable expenses while in personal use to do repairs on the Condo unit.

Forum|Forum|2 years ago
October 2, 2023
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We own a home in SC which is our main residence and separately we have rental property on Myrtle Beach - it's a one condo unit. In 2022 we received $18,359 in rental income. We had 159 rental days and 15 owners day and there was 191 days that the management company could not get to rent out.

We have a contract with the management company that collects the rent, advertises etc. We do repairs on the condo ourselves if we can, to help save us money.

In 2022 the reservation report shows a column Stay Type and that 15 days were blocked for owners use. Our Son who lives in IL came down in July, we have the exact dates and stayed at the Condo to do the repairs. We had a leaking ceiling and damaged interior walls, so he stayed there and repaired the ceiling and walls so it can be ready for the next set of renters. Would that be considered Personal Use still?

Rental Income: $18,359

Expenses: $14,375

Depreciation: $4,127.00

which shows a loss for this year for ($143.00)

Our question is on limitation rental loss. Our son did stay there to do the repairs so would that still be considered personal use? If so, they we would have to refigure the allowable deductible expenses?

Out of the 365 days:

Rental Days: 159

Owner Use to do repairs: 15

No Rental days: 191

what would the percentage be for us if we have to consider his stay as Personal Use.
Would it be: 159 / (159 + 15) = .9137 = 91.37%

do you also include the non rental days: 159 / (350* + 15) = .4356 = 43.56%

*Note: the 350 came from 159 rental days plus 191 non rental days.

OR we are allowed to take the $143 Loss because work was being done the entire time our Son stayed there for those 15 days.

Also, if the unit sits vacant because the management cannot get renters, we're still allowed to deduct the everyday expenses, correct? The management company advertises constantly to get renters in there.

Thank you in advance for your assistance.

TurboTax Home & Biz Windows

Anonymous_

Employee

A day of personal use does not include any day during which you are engaged in repair and maintenance on a substantially full-time basis, per Section 280A(d)(2)

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

Anonymous_

Employee

Also see https://www.irs.gov/publications/p527#en_US_2022_publink1000285446

The foregoing is with respect to dividing expenses.

taxesohmy2017Author

Employee

Thanks for the info on the dividing expenses.

We want to make sure we understand this as well. For our 2022 we don't have to worry about dividing expenses because we didn't use the condo for Personal Use - correct?

And for the 191 days that there were no renters, we still advertised and up keep, we can still deduct those expenses during that period as well - correct? And if we show a loss, we are able to claim that loss correct?