Your own week at the beach house costs you twice. The nights you keep are nights nobody books, and past a line the IRS draws, keeping too many of them changes what you can deduct on all the other nights.
What is the 14-day rule on a rental property?
Two different rules get called the 14-day rule, and they point opposite ways.
The first is about renting at all. There is “a special rule if you use a dwelling unit as a residence and rent it for fewer than 15 days”, and under it you do not report the rental income and you do not deduct rental expenses (IRS Topic 415). Rent out your own home for two weeks during a race weekend and the money is not taxed.
The second is the one owners of nightly rentals run into. You are treated as using a place as a residence if your personal use during the year is more than the greater of “14 days, or 10% of the total days you rent it to others at a fair rental price” (the same page). Stay under that and the house is a rental property. Go over and it becomes a home you also rent out, and the deductions get divided and capped.
That word “greater” is what makes the second rule roomy for a busy listing. A house booked 237 nights gets a bigger personal allowance than a house booked 100 nights, because 10% of the bookings beats the 14-day floor.
How many personal nights does a listing allow?
The allowance moves with the bookings, so it is not a number you can look up once. The example is the calculator’s default short-term rental: a $350,000 house at $375 a night, booked 65% of the year, which is 237 nights.
| Nights booked | 10% of them | Personal nights allowed | |
|---|---|---|---|
| 50% booked | 183 | 18.3 | 18 |
| 60% booked | 219 | 21.9 | 21 |
| 65% booked | 237 | 23.7 | 23 |
| 70% booked | 256 | 25.6 | 25 |
| 75% booked | 274 | 27.4 | 27 |
At 237 booked nights, 10% is 23.7, so 23 personal nights stay inside the line and 24 cross it. The 14-day floor only binds a quiet listing: below about 140 booked nights, 10% of them comes to less than 14, and 14 days is the allowance.
There is a trap in the arithmetic. The nights you take for yourself are usually nights you would otherwise have rented, so taking more personal nights lowers the bookings, which lowers the 10%, which lowers the allowance. Four personal weeks on this house do not get measured against 23.7 nights. They get measured against 10% of what is left.
What do your own weeks cost in bookings?
The tax question and the money question have different answers, and the money one is larger. Take 28 nights for yourself out of bookable time and the house rents 209 nights instead of 237. Every percentage cost moves with the revenue, and the mortgage does not.
| 237 nights booked | 209 booked, 28 personal | |
|---|---|---|
| Bookings | $88,969 | $78,469 |
| Airbnb’s fee (15.5%) | −$13,790 | −$12,163 |
| Co-host (20%) | −$17,794 | −$15,694 |
| Cleaning | −$3,600 | −$3,600 |
| Supplies | −$1,800 | −$1,800 |
| Utilities | −$4,200 | −$4,200 |
| Maintenance (5%) | −$4,449 | −$3,923 |
| CapEx reserve (5%) | −$4,448 | −$3,924 |
| Property taxes | −$4,200 | −$4,200 |
| Insurance | −$2,400 | −$2,400 |
| Mortgage | −$22,354 | −$22,354 |
| Cash flow for the year | +$9,934 | +$4,211 |
These are example figures, not a forecast for any market.
The four weeks cost $10,500 of bookings and $5,723 of cash flow, about $204 a night. They also put personal use at 28 days against a 20.9-day allowance, so the house is now a home you also rent, and the tax treatment changes on top of the $5,723.
What changes once it counts as a home?
Expenses get split by use, and the rental share gets a ceiling. Topic 415 says you “generally must divide your total expenses between the rental use and the personal use” according to the days used for each, and that you “won’t be able to deduct your rental expense in excess of the gross rental income limitation.” A year that would have reported a rental loss reports zero instead.
The capped amount is not lost. Publication 527 says the excess expenses carry forward to the next year as rental expenses for the same property (IRS Publication 527). Depreciation sits at the back of that queue, after interest, taxes and the operating costs, which is worth knowing if you were counting on it: how depreciation works on a rental explains what it is normally worth.
These are the rules as the IRS states them, not a plan for your return. Ask a tax professional how they land on your own numbers.
What counts as a personal day?
More than the nights you sleep there. Publication 527 counts a day of personal use as a day the place is used by you or anyone else who owns an interest in it, by a member of your family or the family of another owner, or by anybody at less than a fair rental price. The family case has an exception: it is not personal use if that person uses the place as a main home and pays a fair rental price. A weekend you give a cousin for nothing is a personal day, and so is a night sold to a friend at half the rate.
One kind of day does not count against you. Days spent “working substantially full time repairing and maintaining (not improving) your property” are not personal use, and Publication 527 says that holds even if family members use the property for recreation on the same day. The line sits between repairing and improving, so a weekend fixing the deck is different from a weekend building one.
Before you block off your own week
Count what you have actually rented at a fair price this year, take 10% of it, and compare that with 14. The bigger number is your allowance, and it will keep moving until the year ends, so leave yourself a margin rather than booking up to the line.
Then price the week. Put your real nightly rate and nights into the Airbnb analysis, drop the Occupancy field by the share of the year you want to keep, and read the cash flow twice. If the owner’s weeks are the reason you bought the house, that difference is the rent you are paying for them. Owners who use the place very little and are chasing the deduction instead should look at the short-term rental tax loophole, which turns on a different count of days.