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Old 03-18-2016, 11:02 PM
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"Fair Rental Days" or "Personal Use Days"

On Form 1040, Schedule E, we have to divide 365 days in the year into "Fair Rental Days" and "Personal Use Days".

My scenario:

A tenant moved into my house on 1/1/2015.
He paid rent for the months of January, February, and March.
Starting in April, he refused to pay rent.
The eviction case ran it course from 4/1/2015 to 7/1/2015.
From 4/1/2015 to 7/1/2015, he continued to live in my house, but never paid any rent.
He was evicted on 7/1/2015.

Do April, May and June count as "Fair Rental Days" or "Personal Use Days"?

Schedule E instruction

https://www.irs.gov/pub/irs-pdf/i1040se.pdf

page 5, middle column, 2nd paragraph says:

"A day of personal use is any day, or part of a day, that the unit was used by:
.....
Anyone who pays less than a fair rental price for the unit"

A fair rental price is $2000/month specified in the rental contract. If he paid $0/month, does that mean "he paid less than a fair rental price"?

I think the answer is absolutely "yes". $0 is less than $2000.

If the answer is "yes", then according the above statement by IRS, are April, May and June "Personal Use" days?


Last edited by sunnysea101ca : 03-18-2016 at 11:08 PM. Reason: typo


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