Converting Personal Use Property to Rental Property

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In a recent court case, the Tax Court ruled that the taxpayers did not effectively convert their vacation home to a rental property because they did not expend any “meaningful effort” to get the home rented. The taxpayers had deducted rental losses and deducted the overall loss on the property upon sale.

Though the taxpayers listed their home for rent with a local agent who merely kept the listing in a portfolio in the agent’s office, no evidence was provided that the taxpayers or the agent engaged in any meaningful efforts. As a result, the Court ruled in favor …read more

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