Many people own rental property of some kind – whether they are renting out part of a primary residence or a vacation home. Regardless of the type of rental property, owners must make themselves acquainted with the various tax rules that apply to it, as these can differ significantly based on the degree to which the property is used for personal purposes.
The first step is to determine the status of the property – either dwelling or mixed-use. A dwelling unit used for personal purposes is not necessarily a main home – main home is defined as the location where a person lives most of the time. A mixed-use property is one that is used for both personal and rental purposes. A day of personal use of a dwelling unit would be any day that it is used by the owner or any other person who has an interest in it, such as a member of an owner’s family, anyone under an agreement that exchanges use of the unit in question for use of some other dwelling unit, or anyone who uses it at less than the fair rental price.