The IRS recently ruled that a taxpayer’s vacation home will qualify as a personal residence under 25.2702-5(c)(2).

This PLR (200126026) involves a woman who inherited a residence, which she now uses solely as a vacation home. She does allow family members and friends to stay at the residence, and she asks them to pay for the use of utilities. But she does not advertise the home as being available for rent.

The land includes a house, a barn, a shed, and a garage. The barn and shed are used for storage purposes only, and other residential properties in the area are similar in nature.

The woman wants to transfer ownership of the house to a trust intended to satisfy all requirements of a qualified personal residence trust (QPRT) under 25.2702-5(c). Her annual personal use of the property exceeds the requirements of 280A(d)(1) (the greater of (A) 14 days, or (B) 10% of the number of days during such year for which such unit is rented at a fair rental).

The IRS ruled that the residence does qualify as a personal residence for the purpose of a QPRT.