Augusta Rule (short term rentals)

[jerry]

Client (a true real estate professional) rented his Hawaii condo out for 7 days in 2023, and used no personal days.  When I enter that, Lacerte still shows a deductible loss.

I thought under the Augusta Rule (Section 280A(g)), neither the income nor expenses were to be recognized if the rental was under 14 days.  Do I have to do something manually?

[TaxGuyBill · Accepted solution]

---

@jerry wrote:

 and used no personal days.

Section 280A(g)), neither the income nor expenses were to be recognized if the rental was under 14 days. 

Have you looked at §280A(g)?  That rule is discussing when a property is used as a "residence" by the taxpayer.

https://www.law.cornell.edu/uscode/text/26/280A#g

[jerry]

You're right, I read right past the "is used during the taxable year."    My bad.

But I just now tried playing with Lacerte and put in 1 personal use day.  It still gives me a deductible loss....

[TaxGuyBill]

---

@jerry wrote:

You're right, I read right past the "is used during the taxable year."    My bad.

But I just now tried playing with Lacerte and put in 1 personal use day.  It still gives me a deductible loss....

---

Is used as a RESIDENCE.  You'll want to look at §280A for the definition of "residence" (it involves more than one day).

[Accountant-Man]

Correct, no income or expenses. Delete Sch E and Assets.

Correction, it is 100% used as a rental. Loss is allowed, shouldn't it be limited as passive?