Gross Income - Rental Income or Loss - Rental of Residence
4 important questions on Gross Income - Rental Income or Loss - Rental of Residence
What is the treatment of a residence rented for fewer than 15 days per year?
Mortgage interest (first or second home) and real estate taxes are still allowed as itemized deductions.
Depreciation, utilities, and repairs are not deductible.
How is a residence treated if rented for 15 or more days and used personally?
- more than 14 days or
- more than 10 percent of the rental days
It is treated as a personal/rental residence. Expenses must be prorated between personal and rental use.
For a personal-rental property, how does one deduct mortgage interest and property taxes compared to other expenses?
- Deductions for rental mortgage interest and property taxes are allocated = rental days / 365.
- The personal portion may be deductible on Schedule A if the taxpayer itemizes.
- Utilities, insurance, and depreciation are allocated = rental days / total days the property was used
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What is the limitation on deducting rental use expenses for a personal-rental property?
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