Can my father use our house as a tax deduction for his business?

Question

My father and I are on the title of this house. He lives in his own house with his new family and runs a business there, but uses this address for tax deductions (the business used to be here). He tells his accountant this place is employee housing, but really it is where my husband and I live. We want to take over the mortgage, without his name on the loan, but he demands that he is dependant on this tax break, although the business is not run here nor are there employees of his living here.

Answer 1

Of course your father cannot use the house you live in as a business tax deduction, claiming it is for business employees. That is, unless you or your spouse are in fact his employees and he is letting you live there rent-free or at a reduced rent.

If his name is on the title and the loan, he can take the real estate taxes that he pays. If he considers this his second home, that he lets you live in rent-free, he can take the mortgage interest that he pays as well.

You cannot control what your father puts on his taxes, so don't worry about it.

I hope he is paying at least half the mortgage and taxes, since he is benefitting from those payments.

Answer 2

Your father's cheating on his taxes. Even if the house is in his name, he's not using it for business purposes. He's not housing any employees there. He can claim a portion of the house where he lives for business, since he runs a business there. But, since you're not his employees, he can't claim it as employee housing.

Additionally, if you were his employees and were receiving this house or part of your mortgage payment as compensation for being employees, then you'd be required to claim that as income.

Last, but most certainly not least, you are right to want to get your father off the mortgage. He's cheating on his taxes, and, if he's ever caught, the IRS could seize your house to pay the back taxes and penalties that he owes, if he doesn't pay them himself. Your best to get clear of his little tax fraud.

Answer 3

The answer is yes and no. Yes, he can because apparently he's been getting away with it to this point. No, he cannot LEGALLY use the house as a business expense, because it's obviously not used to house employees. If audited, he could face heavy fines and jailtime.

Answer 4

Of course he can use it. Is it right, well wht do you think. Does the company pay the cost of the mortgage? They do? Well then they shoudl get the break. You pay the cost of the mortgage? You and your husband arent able to take the interest deductionn on your taxes? Then you should....YOU get the idea....

Dad, how much money do you get for this tax break?
Dad, this is how much I lose.


It is his house...or is it your house?
Who pays the taxes, insurance and payment?

Answer 5

What your father is doing is illegal, pure and simple. It's tax fraud and could land him in prison.

If he refuses to sell you the home -- you probably don't have a right to assume the mortgage without qualification -- then you should find a place of your own and leave him to his own criminal activities.

Answer 6

in user-friendly terms the guy(s) who's legally obligated to pay mortgages (the borrower) and taxes (proprietor) can declare deductions for them. that is not suitable who's genuinely making the money.

Answer 7

SO..
YOU DON'T HAVE THE MORTGAGE YET..HE IS MORE OR LESS FRONTING AND BETTER HOPE HE DOES NOT GET CAUGHT.
BUT WHY ARE YOU SO CONCERNED? WHEN YOU GET HIS NAME OF THE TITLE -HE CAN'T DO IT.
WHO PAYS THE LOAN?
YOU? THEN GET HIS NAME OFF ASAP-NO MATTER WHAT HE SAYS BY SIMPLY TELLING HIM ITS DO OR DIE.
OFF THE LOAN PAPER WORK OR THE IRS GET A CALL AND IT WILL COST HIM SILLY NILLY IF YOU DO CALL THEM....