The safe harbor applies only to the determination of whether a dwelling unit
qualifies as property held for productive use in a trade or business or for investment for purposes of Sec.
The fee will apply to all new residential development as well as changes in use that result in more dwelling units
Secondary dwelling units
often rob neighbors of the privacy and tranquility they once had, and for which they bought their property.
in buildings containing four or fewer dwelling units
After this conversion, the property constitutes two separate dwelling units
It focuses on dwelling units
and common areas in buildings built before 1960.
Portion of property separate from dwelling unit
: In many situations, the property may have a dwelling unit
for which the taxpayer meets the Sec.
Even though the rental value of the 200 square feet the taxpayer uses for a home office is not treated as rental income from a dwelling unit
, the entire building satisfies the "80%" test for treating it as residential rental property.
The second situation involves a dwelling unit
that was rental property, but qualifies for Sec.
If the residential and nonresidential portions are within the same dwelling unit
, no allocation is needed; only the portion of the gain attributable to the depreciation taken on the nonresidential portion would be taxable.
Notwithstanding any other provision of this section or section 183, if a dwelling unit
is used during the taxable year by the taxpayer as a residence and such dwelling unit
is actually rented for less than 15 days during the taxable year, then--no deduction otherwise allowable under this chapter because of the rental use of such dwelling unit
shall be allowed, and the income derived from such use for the taxable year shall not be included in the gross income of such taxpayer under section 61.
Paragraphs [c](1) and [c](3) shall not apply to any item which is attributable to the rental of the dwelling unit
(or any portion thereof) by the taxpayer to his employer during any period in which the taxpayer uses the dwelling unit
(or portion) in performing services as an employee of the employer.