Real Estate Tax Calc
What counts as a personal use day
Under IRC § 280A(d)(2), a day counts as a personal use day if the dwelling unit is used by any of the following people:
- You or any co-owner for any personal purpose — a weekend stay, a family gathering, a vacation.
- Any family member of you or a co-owner, unless that family member uses the property as their principal residence and pays a fair rental price. Family includes your spouse, ancestors (parents, grandparents), lineal descendants (children, grandchildren), and the siblings and spouses of any of these individuals.
- Anyone under a reciprocal arrangement — for example, a friend who lets you use their beach house in exchange for use of yours, even if no cash is paid. The arrangement doesn't have to be explicit; any informal swap triggers this rule.
- Anyone paying less than fair market rent — including guests, short-term renters at a discount, and anyone you allow to stay at a reduced or nominal rate.
Any day in these categories counts as a full personal use day, even if you were there for only a few hours.
What does NOT count as a personal use day
Several types of days are specifically excluded from the personal use count:
Maintenance and repair days. Under § 280A(d)(2), any day you use the property solely for repairs or maintenance does not count as personal use. If you spend a weekend replacing a water heater, painting the exterior, or fixing the HVAC, those days are repair days — not personal use. The key word is "solely": if you combine a maintenance trip with any recreational use, the day converts to personal use. Keep a repair log that documents the specific work performed on each visit.
Vacant days. Days when the property sits empty — between tenants, listed for rent but not yet rented, or simply unoccupied — count as neither fair rental days nor personal use days. They are ignored entirely in the Schedule E counts.
Fair-rental-price days with a qualifying family member. If a family member uses the property as their primary home and pays you a demonstrably fair market rent, those days are fair rental days under § 280A(d)(3), not personal use days. This carve-out is narrow: the rent must reflect what an unrelated tenant would pay in the open market, and the family member must use it as their main home.
The 14-day / 10% rule: the threshold that changes everything
Your total personal use days for the year are compared to a threshold under IRC § 280A(d)(1). If personal use exceeds the greater of:
- 14 days, or
- 10% of the number of fair rental days during the year,
the property is treated as a personal residence for that tax year. The consequence is significant: you can still deduct rental expenses, but only up to your gross rental income. Any remaining expenses — the net loss — are disallowed and are not carried forward to future years. They are simply lost.
If personal use stays at or below the threshold, the property is treated as a pure rental. Net losses are allowed (subject to the passive activity rules under IRC § 469) and can offset other income or carry forward indefinitely.
A worked example: three rental scenarios
Concrete numbers clarify how close any given property is to residence status. Assume total annual expenses of $30,000 for all three scenarios.
Scenario A — Under the threshold: You rent a beach house for 80 days at market rent and use it personally for 10 days. The 10% test threshold is 10% × 80 = 8 days. The 14-day test threshold is 14 days. The greater threshold is 14. Your 10 personal days fall below 14, so the property is not a residence. Full rental treatment applies. Rental expenses are deductible in full against rental income, and any net loss can carry forward under the passive activity rules.
Scenario B — Exceeds the 14-day threshold: Same beach house, but you now use it for 20 personal days and rent it for 60 days. The 10% test: 10% × 60 = 6. The greater threshold: 14. Your 20 personal days exceed 14, so the property is a residence. Expense allocation is required under § 280A(e): the rental share is 60 / (60 + 20) = 75%. Deductible rental expenses are capped at 75% × $30,000 = $22,500. If rental income is $18,000, you may deduct expenses up to $18,000. The remaining $4,500 is lost.
Scenario C — Exceeds the 10% threshold: You rent the property for 300 days and use it personally for 35 days. The 10% test: 10% × 300 = 30. The 14-day test: 14. The greater threshold: 30. Your 35 personal days exceed 30, so the property is a residence despite being mostly rented. This catches owners of frequently rented properties who assume 14 days is always the ceiling. With 300 rental days and 35 personal days, the rental allocation is 300 / 335 = 89.6%. Expenses are deductible to 89.6% of $30,000 = $26,866, but only up to rental income.
How personal use days affect expense proration
When you have both rental and personal use days, shared expenses — mortgage interest, insurance, property taxes, utilities, depreciation — must be prorated. Two methods exist under tax law:
The IRS method (required for residence-status properties under § 280A(e)): Allocate by rental days divided by the sum of rental days plus personal use days. A property with 60 rental days and 20 personal days assigns 60 / 80 = 75% of shared expenses to rental. Vacant days are excluded from the denominator. This method typically produces a larger rental allocation than the alternative.
The Tax Court method (available for non-residence properties): Allocate by rental days divided by the total days in the year (365). The same 60-day rental property allocates 60 / 365 = 16.4% to rental. Because a smaller fraction of expenses is classified as rental, more falls into the personal bucket — where costs like mortgage interest and property taxes may be deductible on Schedule A. Some non-residence property owners prefer this method to maximize itemizable deductions.
The practical rule: if the property qualifies as a residence (personal use over the threshold), you must use the IRS method and you cannot deduct a net rental loss. If it is a pure rental (personal use under the threshold), the Tax Court method is an option and losses are allowable.
Reporting personal use days on Schedule E
Schedule E, Part I asks for two figures for each rental property: fair rental days and personal use days. These are line items at the top of each property column. The IRS uses these numbers, combined with your reported income and expenses, to verify that your expense deductions are properly limited.
If your property has personal use days, you are also required to attach a statement showing how you prorated shared expenses between rental and personal use. In practice, this is commonly handled by tax software using the allocation rules described above. The statement should show the total of each shared expense, the proration percentage, and the rental-share amount carried to the main Schedule E lines.
Omitting the personal-use-day count — or reporting zero when you actually had personal use — is a common audit trigger for vacation-destination properties. Examiners know that beach houses, mountain cabins, and ski condos are often personally used, and a Schedule E with zero personal days for a property in a popular resort area will draw scrutiny.
The 15-day exclusion: a different rule
A separate provision, IRC § 280A(g), applies when a home is rented for fewer than 15 days during the year. Under this rule — sometimes called the "Augusta Rule" because it gained fame in the context of homeowners near the Masters Tournament — you do not report the rental income and you do not deduct any rental expenses. The income is simply excluded. Personal use during the rest of the year is irrelevant to this calculation.
This 15-day exclusion is distinct from the 14-day personal use threshold. The exclusion asks how many days the property is rented; the personal use rule asks how many days you use it personally. They operate independently. If you rent your primary home for 12 days and pocket the income tax-free under § 280A(g), you do not need to worry about personal use days for that transaction — but the exclusion is only available for days rented from what is otherwise your home, not from a standalone rental property held for investment.
Common mistakes with personal use days
Treating maintenance days as personal use. The most frequent error is counting days spent on repairs as personal use. A week of painting, plumbing work, or HVAC repair does not count, provided the visit is solely for maintenance. Many owners add these days to their personal tally and accidentally cross the residence threshold, losing deductible losses for the year.
Forgetting reciprocal arrangements. If you allow a friend to use your rental in exchange for using theirs — or any similar swap — those days are personal use even if no cash passes. Informal arrangements are caught by the same rules as cash-discounted rentals.
Underreporting family-member stays. Any family stay below market rent counts as personal use. A college-age child staying for the summer at below-market rent, a parent visiting for a month "for free," or siblings staying at a family discount all create personal use days. The only way to reclassify those days is to charge and document genuine fair market rent.
Confusing the 14-day test with the 10% test. The threshold is the greater of 14 days or 10% of rental days. High-rental-activity properties have a higher personal-use tolerance, but they also face a higher 10% ceiling. Both tests must be run every year.
Using the wrong proration method. If your personal use days push the property into residence status, the IRS § 280A(e) method is required — not the Tax Court method. Using the Tax Court method for a residence property can understate rental income or overstate rental deductions.
Recordkeeping for audit defense
Because the personal-use-day count is self-reported on Schedule E and directly determines whether a loss is allowed, it is one of the first things an examiner focuses on for vacation or short-term rental properties. The best defense is a contemporaneous log: a calendar or booking platform record that tracks who stayed on which dates, what the purpose was (rental, repair, personal), and, for any family-member rental, what rent was charged and what market comparables supported it.
A repair log is equally important. For each maintenance visit, record the date, who was present, what work was performed, and how many hours were worked. This separates repair days from personal days in a way that is persuasive to an examiner. A spreadsheet rebuilt from memory months or years later is far less convincing than a calendar maintained in real time during the year.
Keep records for at least three years after the return is filed — the standard assessment period — and longer if the return claims large losses or if there is any reason the IRS might question the rental vs. personal classification. For properties near popular vacation destinations, build your records as if an audit is certain: the return is statistically more likely to be reviewed, and the documentation requirement is the same either way.
Frequently asked questions
Does renting to a family member at a discount count as personal use?
Yes. If a family member pays less than fair market rent, those days are personal use days regardless of whether any money changes hands. Only days where the family member pays full fair market rent escape the personal-use classification.
Does one night count as a full personal use day?
Yes. Under IRS rules, any day you or a family member uses the property for personal purposes counts as a full day, even if the stay is only a few hours. There is no partial-day rule.
Do repair trips count as personal use days?
No. Days spent solely for maintenance or repairs — not for personal enjoyment — are excluded from the personal use count under IRC § 280A(d)(2). Keep a log documenting that the visit was for repairs, not recreation.
What happens when personal use exceeds the 14-day threshold?
The property is treated as a personal residence under IRC § 280A. You can still deduct rental expenses up to rental income, but you cannot claim a net rental loss. Expenses exceeding rental income are lost — they do not carry forward to future years.
Can charging family members fair market rent eliminate personal use days?
Yes. Under IRC § 280A(d)(3), if a family member uses the property as their principal residence and pays a fair rental price, those days count as fair rental days rather than personal use days. Document the market rent rate with comparable rentals in case the IRS asks.
Educational information and estimates only. Not tax advice. Tax rules change and vary by situation; consult a qualified tax professional before acting.