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I have a home in Maine which I rent out during the summer on

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a weekly basis. As...
I have a home in Maine which I rent out during the summer on a weekly basis. As a passive investment, the depreciation goes unused. I have been told by a CPA friend that since it is a weekly rental which requires, maid service, garbage pick up, checking in-checking out, that it would qualify as a "hotel" business and then the depreciation could be used against my overall income. Is that correct?
Submitted: 5 years ago.Category: Tax
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Answered in 7 minutes by:
7/23/2012
Tax Professional: Charles Markham, EA, MST, USTCP replied 5 years ago
Charles Markham
Charles Markham, EA, MST, USTCP
Category: Tax
Satisfied Customers: 769
Experience: IRS Enrolled Agent, US Tax Court Practitioner
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TaxWhisperer :

Your CPA friend is correct.

TaxWhisperer :

If the average length of stay is less than 8 days, Temp. Treas. Reg. § 1.469-1T(e)(3)(ii)(A) specifically excludesthe activity as a rental activity.

TaxWhisperer :

This allows for the loss and the depreciation.

TaxWhisperer :

Here is an article that turned up on google:

TaxWhisperer :

This court case is strange. In this case, the person WANTED the hours to count as rental, but because of the 7 day rule, they did not.

TaxWhisperer :

I see you in chat, Any questions or comments?

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Charles Markham
Charles Markham
Charles Markham, EA, MST, USTCP
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