Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Income — Rental and Schedules K-1

Special Allocations

Personal Use of Rental Property

Questions in Part I, line 2 of Schedule E ask for information on the number of rental days at fair rental value and the number of days for personal use. If taxpayers rented out a dwelling unit that they also used for personal purposes during the year, they may not be able to deduct all the expenses for the rental part.

Dwelling unit (the unit) means a house, apartment, condominium, or similar property. A day of personal use is any day, or part of a day, that the unit was used by:

  • The taxpayer for personal purposes,
  • Any other person for personal purposes, if that person owns part of the unit (unless rented to that person under a "shared equity" financing agreement),
  • Anyone in the taxpayer's family (or in the family of someone else who owns part of the unit), unless the unit is rented at a fair rental price to that person as his or her main home,
  • Anyone who pays less than a fair rental price for the unit, or
  • Anyone under an agreement that lets the taxpayer use some other unit

Exceptions

Taxpayers who used a dwelling unit as their main home may not have to count all that time as "days of personal use." Do not count as personal use any day the taxpayer:

  • Worked substantially full time repairing and maintaining the unit, even if a family member used it for recreational purposes on that day, or
  • Used the unit as the taxpayer's main home before or after renting it or offering it for rent, if the taxpayer rented or tried to rent it for at least 12 consecutive months (or for a period of less than 12 consecutive months at the end of which the taxpayer sold or exchanged the home)
Schedule E, Question 2, Yes and  No columns showing.