Tax HELP with STR — Maximize Write-Offs

[Evan Williams]

Hey Guys...I’m hoping you can help me (legally) avoid sending the IRS a check for almost $30K.

I bought my first STR in November of 2018. It was a brand new build, and there was lots of work to do to get it set up. I stayed at the house in December, January and February getting it ready. We started renting it March 1st 2019.

We made two short trips there in May and September to check on the place and to perform maintenance (10 days total between the 2 trips).

Things were going so well that we decided to build a second STR. We closed on the second house in December 2019.

I stayed at the first house in November and December 2019 while we were finishing the build on the second house.

My CPA says that because I stayed at the first house for more than 14 days in 2019, I can’t take all of my expenses/deductions/depreciation. He says that I need to use a ratio of days I stayed there vs. days rented, which translates to me only taking 35% of expenses.

Does this sound right to you? Given the fact that I was staying at the house to set it up, perform maintenance, and work on my 2nd house, I assumed I could take all expenses.

Is there any way around this? How can I make trips there in the future to check on things and perform maintenance while still enjoying all of my write offs?

Please HELP! :-) Thanks so much!

[Natalie Kolodij]

No- You weren't renting it WHILE it was your personal home. 

It just wasn't in service as a rental til the day you moved out and it was listed. 

Talk to some other tax pros, file an extension, and don't leave a bunch of money sitting on the table for no reason. 

I'd look around here on BP for someone who knows real estate tax