Can I deduct hotel expenses when renting out my primary residence after wildfire displacement?

This is a really thoughtful thing you're doing! From a tax perspective, there are a few important considerations. When you rent out your primary residence, it becomes an income-producing property, and yes, you need to report that rental income. For deductions, you can claim expenses directly related to the rental - things like insurance, property management fees, repairs, depreciation for the time it's rented, and even mortgage interest. Unfortunately, your hotel expenses wouldn't generally be deductible against your rental income. The IRS considers these personal living expenses, not expenses necessary for generating the rental income. It's similar to how someone can't deduct their apartment rent if they decide to rent out a house they own. What might help your situation is treating this partially as a temporary relocation for business purposes, but that's complicated and would likely require professional guidance given your specific circumstances.

After dealing with a similar situation last year (though I was renting out a second property, not my primary), I found taxr.ai super helpful for figuring out the complicated parts of my taxes. I was confused about what expenses I could deduct and how to properly report everything. I uploaded some documents to https://taxr.ai and they analyzed my specific scenario, explaining exactly what was deductible and what wasn't. They even helped me understand how to structure things better for next year. Might be worth checking out since your situation has some unique aspects.

Just wanted to follow up about taxr.ai that I mentioned before - I decided to try it out for my rental situation and wow, it actually worked great! I uploaded my documents and got a detailed explanation about exactly which expenses were deductible for my rental property. They specifically addressed my question about hotel expenses when renting out a primary residence and explained the tax code sections that apply. Saved me from making a mistake that could have triggered an audit. The analysis even included suggestions for structuring things differently next year to improve my tax situation. Definitely worth checking out if you're in this kind of complicated rental scenario.

If you need to talk to the IRS about this situation (which might be a good idea), don't waste days trying to get through on the phone. I used https://claimyr.com to get connected to an IRS agent in about 15 minutes instead of spending hours on hold. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was skeptical at first, but I needed clarification on some rental property rules similar to your situation, and it actually worked. The IRS agent I spoke with gave me specific guidance on handling temporary displacement situations like yours. Saved me a ton of time and frustration!

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it anyway because I was desperate to talk to someone at the IRS about my rental property situation. It actually worked! Got connected to an IRS agent in about 17 minutes instead of the hours I'd been spending trying to get through. The agent gave me specific guidance on my rental property questions that cleared up all my confusion. Now I feel much more confident about how to handle my tax situation correctly. For anyone dealing with complex rental scenarios like the original poster, being able to get direct answers from the IRS is incredibly valuable. Saved me from potentially making costly mistakes on my return.

Have you considered doing a 1031 exchange? My accountant suggested this when I was in a somewhat similar situation last year. It might help defer some of the tax implications.

One thing nobody's mentioned - if you're only renting your home temporarily, you might consider a different approach. Instead of creating an LLC, you could structure this as a month-to-month arrangement with lower rent and just gift the difference between market rate and what you're charging. It could potentially simplify the tax situation.