Tax Consequences of Homeownership

Vacation Home: Personal vs. Rental Use

• The Scenario: Junior owns a vacation home and needs to categorize usage days for tax purposes.

• Step 1: Total Personal Use Days

  • Direct Stay: 39 days.

  • Rented to Relatives: 39 days (21 + 18). Note: Relatives always count as personal use.

  • Discounted Rent: 4 days (Friend).

  • Total: 82 Personal Days.

• Step 2: Total Rental Use Days

  • Market Rate Rent: 59 days.

  • Total: 59 Rental Days.

• Step 3: Days to Ignore

  • Maintenance: 2 days (These don't count toward personal or rental).

  • Available for Rent: 157 days (Only "actual" use days matter for these ratios).

Got it. Let’s tighten these up into high-speed bulletins for your "Home Ownership" page.

Heading: 🏠 Module 5 | Vacation Home Classification

Juniors House: The Relative Rule

• Personal Days (82): 39 (Direct) + 39 (Brothers) + 4 (Discount). Relatives always count as personal.

• Rental Days (59): Only third-party market rate stays count.

• Maintenance (2): Ignored for classification math.

• Classification: Residence (Personal use > 14 days and > 10% of rental days).

Seo-yeon’s Condo: The 14-Day Floor

• Personal Days (16): Direct usage.

• Rental Days (11): Direct rental.

• The Test: 16 days is more than 14 days and more than 1.1 days (10% of rental).

• Classification: Residence (Even with low usage, hitting 14 days triggers residence status).

Vacation Home Classification (The Flip)

Seo-yeon’s Condo: Case C (The Non-residence)

• Personal Days (6): Direct usage.

• Rental Days (11): Direct rental.

• The Test: 6 days is less than 14 days (the IRS floor).

• Classification: Non-residence (rental property).

Seo-yeon’s Condo: The Clear Residence

• Personal Days: 61 days.

• Rental Days: 82 days.

• The Test:

  • Is 61 days > 14 days? Yes.

  • Is 61 days > 8.2 days (10% of 82)? Yes.

• Classification: Residence (Significant Persona