Rental property occasionally used by elderly parents

Forum|Forum|2 years ago
March 11, 2024
1 reply
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I just bought a condo that will be used as a rental property. I have a separate home nearby and not intending to live in the new place at any time. However, I would like my elderly parents living abroad to occasionally stay in the rental property (like 2 months per year). Do I need to report that time as personal use and reduce expenses accordingly? If that is the case, can I rent the place to my parents for a nominal fee (like $200/month) so that I don't have to report that time as a personal use? Thanks in advance!

Anonymous_

Employee

@circle11 wrote:

.....Do I need to report that time as personal use and reduce expenses accordingly?

Yes, you do.

@circle11 wrote:

....If that is the case, can I rent the place to my parents for a nominal fee (like $200/month) so that I don't have to report that time as a personal use?

No, you can't. Per Section 280A, every day you rent to an immediate family member (such as your parents) is considered to be a day of personal use unless they use the property as their principal residence and pay fair rental value (in your hypo, they're doing neither).