My wife & I just bought a duplex, and would like to renovate it for rental purposes. We think it'll be easiest to renovate ourselves while we live there, in one of the sides.
But this changes the tax rules (the 14-day rule, which tops out your deductions at the amount of rent collected for the year). Since all the expenses are for rental purposes, is there any good strategy here to still be able to claim those deductions?
That is NOT what I got from reading the IRS publication 527 "Renting Part of a Property" section. While you are living in one side and rehabbing that is your primary residence. When you move out that side changes status to become a rental per example with Eileen.
The 14day section you reference seems to refer to using the property WHILE you have it listed as available for rent. See the example regarding the beach cottage.