Section 280A personal use: the 14-day rule that voids a loss

By Max Medvedev · 6 Aug 2026

How much personal use is too much

Personal use of a short-term rental is capped at the greater of 14 days or 10% of the days it was rented at fair value. Cross that line and IRC §280A(d)(1) makes the dwelling a residence, §280A(c)(5) caps deductions at rental income, and the loss that was going to shelter your W-2 stops existing. No hours log fixes it.

The limit is a comparison, not a number

"Fourteen days" is only half the rule. The ceiling is the greater of 14 days or 10% of the days the unit was rented at fair value, which means it moves with how hard the property works.

The 14-day floor governs most owners, because a property rented under 140 days a year never reaches the other branch. Above 140 rented days, the 10% branch takes over and the allowance grows.

Read "days rented" strictly: days rented at fair value. A night handed to a friend at half price is not one of them.

What crossing it costs

Once personal use passes the line, the dwelling is a "residence" for the year, and two things happen in order.

1. §280A(e) allocates. Expenses split between rental and personal use on the ratio of fair-rental days to total days the unit was used.
2. §280A(c)(5) caps. The rental share of deductions cannot exceed the rental income. The excess is disallowed for the year and carries forward against future rental income from the property.

Step two is what ends the strategy. A cost segregation study plus 100% bonus depreciation can produce a $190,000 deduction; if the property is a §280A residence with $45,000 of rental income, $45,000 lands and the rest waits.

That year passes the first two gates cleanly. 180 nights across 30 reservations averages 6.0, and 520 solo owner hours clear every participation test in Reg. §1.469-5T(a). Thirty family nights against an 18-day limit is the only thing wrong with it, and it is enough to take the whole shelter to zero.

What counts as a personal day

§280A(d)(2) is wider than "nights you slept there." A day is personal use if the unit is used by:

• You, or anyone else holding an ownership interest.
• A family member — even at full price. §267(c)(4) supplies the definition: spouse, brothers and sisters (whole or half blood), ancestors, and lineal descendants. Your sister's week at the posted nightly rate is seven personal days. Cousins, nieces, nephews and in-laws are outside that list.
• Anyone using it under a reciprocal arrangement that lets you use another dwelling, whether or not rent is charged.
• Anyone paying less than fair rental for that day, on the facts and circumstances.

Two carve-outs exist. Days whose principal purpose is repair and maintenance work, performed substantially full time, are not personal days even if the family is there for the weekend. And §280A(d)(3) exempts a fair-market rental to a family member who uses the place as a principal residence — a relief valve for long-term family rentals that does nothing at all for a property booked by the week.

The friend rate gets charged twice

The below-market stay is the quiet one, because it moves both sides of the same fraction.

Take a property that rents 179 days at market, plus one 6-night stay for a friend at 40% off.

• Those 6 nights are not fair-rental days. The base for the 10% branch is 179, not 185, so the limit is the greater of 14 and 17.9.
• Those same 6 nights are personal-use days under §280A(d)(2)(C).

So the discount opens the year having spent 6 of about 17 available days, and every further discounted night pushes the numerator up while pulling the denominator down. A stay at the posted rate costs one day; a stay at a favour rate costs closer to two.

The other 14 in section 280A

§280A(g) uses the same number for the opposite purpose, and the two get confused constantly. Rent a dwelling 14 days or fewer in the year and the rental income is excluded from income entirely — with no rental deductions allowed. That is the Augusta rule, written for someone renting out a home a handful of days a year. It is the mirror image of the trap above, not a version of it.

Why this gate is the one that gets missed

Personal use is gate three of four, and it is the only one that can fail without anybody deciding anything. The average-stay test is arithmetic you can check on demand. The hours test is a log you keep on purpose. Personal-use nights get booked as family plans in March, and no booking platform dashboard flags the eighteenth one.

The four gates in order — classification, participation, §280A, then the loss limits — is the map. Note that gates one and three count days in completely different ways: the seven-day test divides nights by reservations and never looks at the calendar, while §280A counts calendar days and never looks at reservations. A property can pass one and fail the other on the same set of bookings.

The record that answers this gate is small. Every occupied night labelled guest, owner, family, or below-market; the fair-market rate written down next to any discounted stay; the repair-day invoices filed with the dates they cover. A few fields per booking, captured as the year happens, and gate three is answered before anyone asks.

Count the nights before you book them

Run your year through the estimator — it applies the greater-of-14-or-10% limit against your fair-rental days, shows what the §280A cap would take out of the deduction, and cites the subsection behind each step. For gate one on its own, there is an average stay calculator.