The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Re: converting residence to rental property Date:  12/1/1998  6:45 PM
Author:  TMFTaxes Number:  6628 of 130015

[[Just read your post and I realize much time has passed, but thought I'd reply anyway. In a similar
circumstance, I was surprised to find that because we we occupied the house more than 14 days in
the year of conversion from residence to rental property, the rental was forevermore treated under
vacation home rules (even though we didn't occupy it at all after the conversion). ]]

If I understand what you are telling me, I don't think that your information is correct. It MIGHT be correct in the year that the property was "mixed use", but certainly not correct in the years FOLLOWING the conversion.

[[ As I recall, the consequence of that is that your expenses plus depreciation can't exceed rental
income, so it doesn't serve to shelter other income. Just want you to go in with your eyes open. If
this is an issue for you you may want to confirm it with a tax lawyer or someone else here.]]

That's very basically correct...for "mixed use" property. But, again, this might only apply in the year of conversion, and should NOT have applied in any years after the conversion from personal property to rental property.

TMF Taxes

Want to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. There is still time available to do that tax planning (and tax saving) before the end of the year. So just click on this link ( to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on and you'll be right at the home page. Pay special attention to the "archives" section. Check it out. Finally, if you need to get to the IRS web site, click on to go directly there.

Copyright 1996-2020 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us