Selma owns a beach cottage that she rents to tourists. In 2015 she rented the cottage for 90 days. What is the maximum number of days Selma can use the cottage before her expense deduction will be limited to her gross rental income?

Question

Selma owns a beach cottage that she rents to tourists. In 2015 she rented the cottage for 90 days.​ What is the maximum number of days Selma can use the cottage before her expense deduction will be limited to her gross rental income?

Quizplus · Accepted Answer

According to IRS rules, if Selma uses the cottage for more than 14 days or more than 10% of the total days it is rented (whichever is greater), her expense deduction will be limited to her gross rental income. Since Selma rented the cottage for 90 days in 2015, she can use the cottage for up to 14 days (or less) without having her expense deduction limited. Therefore, the maximum number of days she can use the cottage is 14 days.

Selma Owns a Beach Cottage That She Rents to Tourists