Short Term Rental Property Question

[DCUS7]

Hello All,

I have a Trustee who holds a residence in an Irrevocable Trust.  He rents the residence for 3 months in the summer and then closes it up for the winter.  While he would consider a winter rental if it was the right price and person, he doesn't "actively advertise" the property for rent in the off season.  There are three beneficiaries of the Trust but no personal use by any of them.  After much research my interpretation is that this would be considered a rental property and not a vacation home as that would require personal use.  If that is the case, since he is not actively making it available for rent it would be considered out of service during the off season so he can't deduct any expenses for that period and he can't take any depreciation.   He would report all rental income but would only be able to deduct expenses associated with the rental period (i.e. direct expenses:  commissions, occupancy permit, maintenance and an allocation of insurance, utilities and property taxes).  Is this interpretation correct?   I am thinking he should either allow some personal use by beneficiaries or advertise it for rent (at a high cost) in the off season if he wants to take advantage of the expenses / depreciation deductions.  Any thoughts would be greatly appreciated!

[TaxGuyBill]

Personally, I would deduct expenses and continue to depreciate it all year.

The  IRS or Courts could disagree with me, but that is what I would do.

[DCUS7]

Thank you for your reply!  I discussed with my client.  He did advertise it to a few people (including me!) for a winter rental so we could go the full year route and deduct all expenses and depreciate.  But going forward he is thinking about just opening it for the summer months only as he might be selling in the near future.  So he is going to think about it and get back to me.  I appreciate your reply!!