This time rental days are 128 and personal days are 167. Mixed use. Income of $12K is wiped out by $17K of mortgage interest, RE taxes and direct expenses. Other operating expenses are carried over. My ATX software allows the $5K loss. I was expecting the loss to be subject the passive limits on 8582 but the software has no interest in taking it there. Other income is well above allowing any special allowance on the 8582. Thanks for any thoughts.
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Assuming the taxpayer is Itemizing on Schedule A and only has one other home (for mortgage interest), that sounds correct.
The personal use of the home makes it a non-passive activity, so 8582 does not come into play. The mortgage interest, real estate tax and direct expenses would be fully allowed. The other expenses are carried over in a separate "vacation home carryover" category.
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