• Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off
Reading...
Front

Card Range To Study

through

image

Play button

image

Play button

image

Progress

1/5

Click to flip

Use LEFT and RIGHT arrow keys to navigate between flashcards;

Use UP and DOWN arrow keys to flip the card;

H to show hint;

A reads text to speech;

5 Cards in this Set

  • Front
  • Back

Residence Test

The owner’s personal use of the rental


property for even one day during the tax year will cause application of the


“vacation home” rules.


If the home (dwelling unit) is rented out for 14 days or less (sometimes phrased



as “less than 15 days”), then the rental income is not required to be included in



gross income. However, no deductions attributable to the rental are allowed.

Infrequent Rentals, Frequent Personal Use

If the vacation home is used by the taxpayer for personal use for more than 14


days a year and is rented for fewer than 15 days a year, the rental income is not


taxable.


Expenses



attributable to the rental use of the property, such as repairs, maintenance, and



depreciation, are not deductible.

Frequent Rentals, Infrequent Personal Use

If the vacation home is rented more than 14 days per year and the owner’s


personal use per year does not exceed the greater of 14 days or 10% of the


number of days rented, then all of the rental income must be included in gross


income. Deductions are permitted for a portion of the depreciation, maintenance,


and operating expenses. The portion is determined by dividing the number of


days rented by the total days used by the owner and renters.

Mortgage interest and property taxes



attributable to the rental use are deductible as rental expenses on Schedule E of



the taxpayer’s return, while property taxes attributable to personal use are



deductible if the taxpayer itemizes deductions on Schedule A of his or her return

Frequent Rentals, Frequent Personal Use

If the vacation home is rented more than 14 days per year and during the year the


owner uses the vacation home more than the greater of 14 days or 10% of the


days the home was rented, all of the rental income is reported as gross income.


Deductions allocable to rental use (operating expenses, maintenance, and


depreciation) are limited to this gross income.

if the vacation home does not meet the residence test and the rental


is an activity engaged in for profit, then the deductible rental expenses are


not limited to the amount of gross rental income. The deductible loss


generally may not exceed $25,000, due to the passive loss limitations

true