How do you allocate vacation home expenses between rental and personal use?

Start by separating expenses that are directly tied to rental use from mixed-use expenses. Then allocate mixed-use expenses between rental and personal use, commonly using rental days and personal days. The rental portion is considered under the vacation-home rules and other rental-loss limitations.

Personal portions of mortgage interest and property taxes may be considered under Schedule A rules if otherwise allowable. They do not become Schedule E expenses just because the taxpayer wants rental treatment.