When I research vacation property
i find at least two methods of writing it off.
As a rental property
with a less than 14days or 10% of personal
use, i use schedule E
for 100% of the expenses. the second method, called the vacation home method, is when use is over the limit for personal use, and limits the expenses to the amount of income
received, with some items such as property tax
in excess carried to the sch A.
My tax software
apparently allows a third method of write of. For example, if I rent this 231 days and use it 43 myself (out of the 134 left) total 365, I can use a method called
ie a rental unit used as a home, I can allocate the expenses such as interest
and property tax between the A and the E sch's. without limitation
! that is, I am not sure why anyone would use the limitation on rental property ( tax court method or not) when they can write off all of the property taxes and interest and even pro-rated depreciation
using this rental/home allocation! If i use the property 144 days and rent it 231 days I write off on the sch e 63% of the interest and property tax on the e, (231 days/365 days) Therefore 37% of the interest and property taxes goes on the A, and the balance o0f expenses gets allocated 63% to the E without limitation. All I lose is the 37% of some of the items I cannot wirte of ( ie insurance, 37% of repairs etc)
My question is,why woulod anyone limit there write-off to income on the E, when they can use this % aloocation method?