Tax implication of fair rental days vs personal use days?

Forum|Forum|6 years ago
June 3, 2019
1 reply
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What are the tax implications?

I converted the property to a rental in 2018.

Listed for Rent in February 2018. Tenant moved in August 2018. I lived there as my primary residence until August 2018.

The number of days rented is 150. Personal use days as I understand are the number of days you used the property as your primary residency AFTER it was listed as a rental? Technically I could list 4 months of personal use days. I am just wondering what is the tax implications if I do this? More or less tax?

TurboTax Premier Windows

Best answer by TomK2023

If you use the dwelling unit for both rental and personal purposes, you generally must divide your total expenses between the rental use and the personal use based on the number of days used for each purpose. You won't be able to deduct your rental expense in excess of the gross rental income limitation (your gross rental income less the rental portion of mortgage interest, real estate taxes, and casualty losses, and rental expenses like realtors' fees and advertising costs). However, you may be able to carry forward some of these rental expenses to the next year, subject to the gross rental income limitation for that year. If you itemize your deductions on Form 1040, Schedule A.pdf, Itemized Deductions, you may still be able to deduct your personal portion of mortgage interest, property taxes, and casualty losses from Federally declared disasters on that schedule.

For more information: https://www.irs.gov/taxtopics/tc415

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TomK2023Answer

If you use the dwelling unit for both rental and personal purposes, you generally must divide your total expenses between the rental use and the personal use based on the number of days used for each purpose. You won't be able to deduct your rental expense in excess of the gross rental income limitation (your gross rental income less the rental portion of mortgage interest, real estate taxes, and casualty losses, and rental expenses like realtors' fees and advertising costs). However, you may be able to carry forward some of these rental expenses to the next year, subject to the gross rental income limitation for that year. If you itemize your deductions on Form 1040, Schedule A.pdf, Itemized Deductions, you may still be able to deduct your personal portion of mortgage interest, property taxes, and casualty losses from Federally declared disasters on that schedule.

For more information: https://www.irs.gov/taxtopics/tc415

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Goose83

Where does the software calculate the personal loss limitation for rental properties? For the partnership LLC, it's allowing a net loss, but not updating the loss to $0 due to more than 14 days of personal use. I cannot see the worksheet where it is calculating loss limitations for each expense category.