Fair Rental Days

Fair rental days are actual days a property generates rental income from unrelated parties at rates comparable to market rates for similar properties. Days offered for rent but not rented don't count. Days rented to family members at discounted rates might not qualify as fair rental days if rates are below market. Calculating fair rental days requires determining market rates for your property type and location, then confirming rental rates meet that standard. The 10% test compares personal use days to fair rental days: if personal use is less than 10% of fair rental days AND less than 14 days total, it's a rental property. If a property is vacant many days, those vacancy days don't count as personal use or fair rental days, but they don't improve the rental property classification. Some owners manipulate days by not listing properties during personal use months, reducing personal use percentages. The IRS audits this carefully. Fair rental days must be documented with rental agreements, deposits, and payment records.