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Question

Do I have to manage the rental myself?

Answer

Not necessarily on your own, but to keep the deductions from being suspended as passive losses, you generally need average guest stays of seven days or less plus material participation in the activity. Handing everything to a property manager typically works against that. Keep a contemporaneous log of your hours, since documentation is where these positions most often fall apart under IRS review.

Related FAQs

How does this compare with holding the home for a step-up in basis?

How does converting a home to a rental compare with selling it directly?

What’s the difference between the Section 121 exclusion and a 1031 exchange?
Tax Planning Financial Planning Charitable Giving Retirement Planning Relocating in Retirement Impact of New Laws Tax Basics Tax Tips & Tricks OBBBA Protecting Your Legacy Year-Round Tax Planning Real Estate FAQs
Last Updated Sept. 23, 2026
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