When is a vacation home treated as a residence for rental tax rules?

A dwelling unit is generally treated as used as a residence if personal use exceeds the greater of 14 days or 10 percent of the days the unit is rented to others at a fair rental price.

That classification changes the rental-expense analysis. If the property is a residence with rental use, the preparer must allocate expenses between personal and rental use and apply the vacation-home limitation rules. The taxpayer cannot simply label the property as an investment and deduct every cost on Schedule E.