In short
If a home is rented for fewer than 15 days a year, the rent is tax-free and no rental expenses are deductible. If it is rented longer and personally used more than the greater of 14 days or 10% of rental days, rental deductions are limited to rental income.
Key takeaways
- Expenses are allocated between rental and personal use by days.
- With less personal use, the home is treated as rental property under the passive loss rules.
- Mortgage interest and taxes on personal days may still be itemized.
Where it's tested
TCP: Individual Tax Planning Strategies — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A taxpayer sells stock at a $10,000 loss on December 10 and repurchases the same stock on December 28 of the same year. What is the tax result?