EVENT DESCRIPTION
Residential rental property looks straightforward until personal use enters the picture. A dwelling rented fewer than 15 days generates no income and no deductions; rented 15 days or more with personal use, it triggers § 280A's expense ordering rules, a day-counting exercise with several traps, and a decades-old disagreement between the IRS and the courts over how to allocate interest and taxes.
This two-hour course covers rental property across the full spectrum of personal use. Topics include what counts as rental income, the repair-versus-capitalization standard under Reg. § 1.263(a)-3, depreciation of real and tangible personal property with OBBB's permanent 100% bonus depreciation and expanded § 179 limits, passive activity and at-risk limitations, and the LCM basis rule for converted residences. The § 280A material covers personal use day classification, the three-tier expense ordering rule, and the Bolton and McKinney allocation method compared against the IRS approach. OBBB's revised information reporting thresholds and the $40,000 SALT cap and its effect on tier placement of rental property taxes round out the discussion.
EVENT OBJECTIVE
Upon completion of this course, participants will be able to:
• Identify what constitutes rental income, including advance rent, security deposits, lease cancellation payments, and tenant-provided services.
• Distinguish deductible repairs from capitalized betterments, adaptations, and restorations.
• Determine the depreciable basis of rental real property, including the land allocation and the LCM rule for converted residences.
• Apply OBBB's § 179 limits and permanent 100% bonus depreciation to tangible personal property.
• Recognize the passive activity and at-risk limitations, including the $25,000 active participation allowance and the real estate professional exception.
• Classify days of personal use, rental use, and maintenance under § 280A.
• Apply the three-tier expense ordering rule and compare the Bolton allocation method with the IRS method.
• Recognize OBBB's changes to information reporting thresholds and the SALT cap as they affect rental property.
