How are Personal Use Days vs Fair Rental Days calculated for a multi-family home?

I recently purchased a 4-unit multifamily property and I'm trying to figure out the tax implications. I'm living in one of the units and renting out the other three to tenants. How exactly do I count my personal use days for tax purposes? Is it based on the percentage of the property I'm using (25%) or is it more complicated? Also, for a few months I had a friend staying with me in my unit and they paid me some rent to help with expenses. Does this change how I calculate my personal use days versus fair rental days? I want to make sure I'm getting this right before tax time and maximizing any deductions I might be eligible for. This is my first investment property so I'm still learning all the rules. Any guidance would be super appreciated!

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18 comments

Fatima Al-Farsi

•8M

Great question about personal use days vs fair rental days for your multifamily property! The IRS treats this quite specifically for your situation. Since you're living in one unit and renting the other three, your personal use applies only to the unit you occupy. The other three units are considered rental properties. For tax purposes, you would allocate expenses based on the percentage of personal vs. rental use. In your case, if all units are roughly the same size, you'd have 25% personal use and 75% rental use. For the time your friend stayed with you and paid rent, it depends on whether you charged them fair market value. If you charged them substantially less than fair market value (typically less than 80% of market rate), the IRS may still consider those as your personal use days. If you charged fair market value, those days could count as rental days for that portion of your unit. Remember that expenses for the common areas (roof, yard, hallways, etc.) would be allocated proportionally between personal and rental use.

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Fatima Al-Farsi

•8M

For a duplex where you live in one unit and rent the other, you're exactly right. You would have 365 personal use days for your half, and 0 personal use days for the rented half. Each unit is treated separately. The expenses that are specific to your unit (like repairs inside your living space) are personal expenses and generally not deductible. Expenses specific to the rental unit are fully deductible as rental expenses. Shared expenses that benefit both units (like roof repairs, lawn care, exterior painting) would typically be split 50/50 between personal and rental.

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Sofia Perez

•8M

After struggling with similar multi-family tax questions last year, I found an amazing tool that cleared everything up for me. I was so confused about how to allocate expenses and track personal vs rental days until I discovered https://taxr.ai. You just upload your documents and details about your property usage, and it helps you organize everything correctly for tax purposes. I had a multi-family property with a mixed-use situation similar to yours, and this tool helped me properly categorize all my expenses and determine the correct allocation percentages. It even identified deductions I was missing for the common areas!

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Sofia Perez

•8M

It absolutely works for vacation rentals! It specifically has a section for handling mixed-use vacation properties where you enter your personal use days and rental days, and it helps calculate the appropriate allocation of expenses. It'll even remind you about the 14-day rule and other vacation property-specific tax rules. For complex multi-family properties, I found it incredibly helpful as a starting point before meeting with my CPA. It organized all my information and gave me preliminary calculations, which saved me (and my CPA) hours of work and reduced my billable hours. My CPA was actually impressed with how accurately it had categorized everything. It doesn't replace professional advice for really complex situations, but it makes the process much more efficient.

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Dmitry Smirnov

•8M

Just wanted to share my experience after trying taxr.ai for my vacation property situation. It was seriously a game-changer! I used to spend hours trying to figure out which expenses went where based on my usage days. The tool walked me through everything step by step and explained why certain expenses were allocated differently. It even flagged potential audit risks in my previous approach! The best part was that it helped me document everything properly so if I ever get questioned, I have clear records showing how I calculated my deductions. I'm definitely using it for my 2025 taxes - saved me so much headache and probably a bunch of money too by maximizing legitimate deductions I was missing before.

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Ava Johnson

•8M

If you're trying to reach the IRS to get clarity on your multi-family property tax situation, good luck! I spent WEEKS trying to get through to someone who could answer my specific questions about personal use vs. rental days. Always busy signals or disconnections after waiting for hours. Then I found https://claimyr.com and it completely changed the game. They got me connected to an actual IRS agent in under an hour! You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent I spoke with clarified exactly how to handle the personal use calculation for my multi-family property and confirmed that common area expenses should be allocated based on square footage percentages. Worth every penny to get official confirmation directly from the IRS instead of wondering if I was doing it right.

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Ava Johnson

•8M

It uses a technology that basically waits on hold for you in the IRS phone queue. When a representative finally answers, it calls your phone and connects you. It's completely legitimate - they're just using technology to solve the hold time problem. I was skeptical too until I tried it. I'd been trying for over two weeks to get through about my rental property questions. Used this service, and about 47 minutes later my phone rang and I was connected directly to an IRS representative who answered all my questions about allocating expenses for my multi-family property. The time and stress it saved me was incredible.

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ElectricDreamer

•8M

I have to admit I was wrong about Claimyr. After my skeptical comment, I decided to try it as a last resort because I was desperate to resolve an issue with how I reported rental income on my duplex. I used the service yesterday, and within an hour I was actually talking to a real IRS agent! The agent confirmed exactly how I should be calculating personal use days for my portion of the property and explained that the improvements I made to common areas needed to be depreciated proportionally between personal and rental use. Honestly wish I had known about this months ago. Would have saved me from filing an incorrect return that I now need to amend.

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Zainab Ahmed

•8M

You need to track depreciation separately for the personal portion and the rental portions. When you sell, you'll need to allocate the sale price between the units based on fair market value at the time of sale. For your personal unit, you can potentially use the Section 121 exclusion ($250k single/$500k married) if you've lived there for 2 of the last 5 years. The rental units will be subject to capital gains tax, plus depreciation recapture at 25% for all the depreciation you've claimed (or were required to claim even if you didn't). Keep detailed records of all improvements to establish your cost basis for each unit.

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