Taxpayer had a basement that had been rented out for about 10 years. In mid-2020, the former tenant moved out. Immediately after that, they intended to look for a new tenant. So they put an ad on Craigslist.
In 2021, the basement was vacant for the whole year. So I asked what the situation was there in 2021. Taxpayer was very upfront with me. He said they were very eager to look for a new tenant in late 2020 immediately after the former tenant moved out. But then as the pandemic dragged on, they were very worried about health risks as they had a small kid at home. Therefore, they did not actively look for a tenant in 2021 ("We had practically done nothing" in taxpayer's own words). They did keep the ad on Craigslist just because they did not remove it. Then I asked what they would have done if someone wanted to rent the basement. He said they would be extremely picky and thoroughly screened the applicant. My impression is they were very reluctant to rent the basement out in 2021 unless they found a 'perfect' tenant who posed minimal health risk (such as based on the occupation).
So here is your call: Was the basement a rental unit or not in 2021?