Final answer:
The statement regarding taxation rules for a property rented out for 15 days or more, which is also used for personal purposes for more than 14 days or 10% of total rental days, is true. Expenses can only be deducted up to the amount of rental income.
Step-by-step explanation:
The statement is true. If a residence is rented out for 15 days or more in a year and used for personal purposes for more than the greater of (1) 14 days or (2) 10 percent of the total days rented, it is indeed treated as a personal/rental use residence, according to IRS regulations. For such property, expenses related to the rental use of the residence must be allocated between the days of personal use and the days of rental use. Rental expenses can be deducted only to the extent of rental income, meaning you can't claim a rental loss on your taxes. For instance, if the total rent income for the year is $10,000, but the property expenses allocated to the rental use amount to $12,000, you can only deduct $10,000 of those expenses. It is necessary to follow this approach to ensure compliance with tax laws regarding mixed-use properties.