Need financial help on rental decision
My two sisters and I inherited a house on Cape Cod. We spent our childhood summers in this house and don't want to sell it, but neither do we want to spend our own money on upkeep. So we decided to make it into a rental property (we formed an LLC) and reserve a few weeks in the summer each year for personal use. We're not that concerned with whether we end up with a profit. We'd be very happy just to break even.
We had a bunch of initial expenses - lead testing revealed we had to replace all the windows and the oil furnace died so we are in the process of upgrading it to natural gas. We're planning on starting to rent in late August, for an 11 or 11.5 month lease.
Things are mostly in hand, except as I've been learning about the financial/tax end of things, the big question I have found I need to answer is how many days we can use the house for personal use. I've read IRS pub 527, and I know it's important whether the house is considered a Home. What I don't understand that well is capitalization and depreciation and what the consequences are of exceeding the number of days that would make the property a Home. What are the tax consequences?
For 2015, probably the most we could hope to rent the house for is 120 days. Thanks for any help.
-Jerry