I hope to make this investment the beginning of my sole proprietorship, but i'm a little confused about how i will file my taxes because i will be residing in the rental property with three of my tenants. I need some information regarding how taxes and deductibles work in this type of situation.
2007-06-27 15:59:41 · 3 answers · asked by Trey 1 in Business & Finance ➔ Renting & Real Estate
I used to live in a duplex - I lived in one side and rented out the other. My deductions for the house were split down the middle. For instance if I did some work to one side or the other I could deduct 50% of that, same with insurance, interest and taxes. So I would guess that if you live in 1/4 of the house - then you could deduct 3/4 of your expenses. I once had roomates, but I was subrenting and it sucked. Sharing a kitchen, bathroom and utilities with people is no fun. I wish you the best of luck.
2007-06-27 16:07:09 · answer #1 · answered by Jas 3 · 0⤊ 0⤋
Find yourself a good accountant that knows your state laws. From my experiences, any repairs you make in the house you live in will not be deductable. It will depend on IRS rulings about that, so you need to talk to an accountant. Also before you rent out bedrooms, check with your local city ordinances. I know in my city you are required to have a license as a motel to rent out more than 1 bedroom, which they inspect on regular basis.
2007-06-28 12:00:58 · answer #2 · answered by Midwest guy 4 · 0⤊ 0⤋
I used to rent a basement from a guy when in college. Had no trouble with him though. He had walled it off and built a small kitchen in the basement for his tenants. The only annoying thing was from time to time his pipes would freeze and I would wake up with 2 or 3 inches of water to walk in.
2007-06-27 23:13:24 · answer #3 · answered by Belgariad 6 · 0⤊ 0⤋