Housing and Rent

Discussion in 'Small Business Helper' started by SD_Ryoko, May 5, 2005.

  1. SD_Ryoko

    SD_Ryoko <img src="\usflag.gif" align="left"/>&nbsp; Admini Staff Member

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    Say I buy a house. Yes, I would be living in it.

    And someone else, say a freind, was paying me rent to live there.

    Can I claim depreciation on my taxes? :D
     
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  2. BrokenX

    BrokenX New Member

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    That doesn't make sense your friend is paying you? To live there... and yes, you could claim depreciation.

    BrokenX
     
  3. SD_Ryoko

    SD_Ryoko <img src="\usflag.gif" align="left"/>&nbsp; Admini Staff Member

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    How does it not make sense?

    Like a roomate; only you own the place. Instead of splitting rent together, he pays you rent. Few people would let you live with them for free; people cost money to house. Those who cannot afford to buy their own place, pay rent. Even if my girlfreind moved in she'd have to help out on bills.
     
  4. BrokenX

    BrokenX New Member

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    yeah alot of things in this damn world relate around money its rather sad actually if you look at it. Sad like the income and taxes and all that other stuff that comes along with life

    george - I just got my insurance
    sandy (Works at insurance) - oh and heres what we will be taking off your salary
    george - it says 50 grand? Am I on funniest home videos... you got me on one of those don't you :D.
    sandy (Works at insurance) - ohm... no this isn't a joke or prank that is the real thing.
    sandy (Press security button) - have a nice day or life :S?

    BrokenX
     
  5. The Helper

    The Helper Administrator Staff Member

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    Take depreciation on what? You talking about State Income Tax or your property taxes. Here in Texas the appraise your house and base taxes off that and we have no State Income Tax. Please describe your problem further. Also, if your friend lives with you and pays you cash I don't see why you would even say anything or if there is any law that says you have to as long as you own your house and you live there.
     
  6. SD_Ryoko

    SD_Ryoko <img src="\usflag.gif" align="left"/>&nbsp; Admini Staff Member

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    Depreciation is GOOD thing.

    Its for landlords really. Went you rent out a place, you can claim depreciation costs against the property taxes (or something like that)

    Guys at work have rental houses, and they get like $3000 back from claiming depreciation.

    So if someone pays rent to ME, can I claim depreciation, even If I live there?
     
  7. BrokenX

    BrokenX New Member

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    You would have to look into it, but I don't see why you couldn't... seems right to

    me.

    BrokenX
     
  8. The Helper

    The Helper Administrator Staff Member

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    You might want to wait for tsbhelper on this one but I think that is going to be specific to what taxing authority you are paying your property taxes to.
     
  9. SD_Ryoko

    SD_Ryoko <img src="\usflag.gif" align="left"/>&nbsp; Admini Staff Member

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    Sigh... Buying a house costs a fortune.

    I think I will just by a crack house for 20 g's (minus the crack). Get cable modem, a a tv, and save my money.

    Then as time goes on, I can buy up crack houses around it. I'mma be a slumlord of the hood.

    I drive through the 'hood where my turf is, all pimped in the black Escalade with tint and 20" rims. And all the tenants will quickly go back into their house. OMG here come Ryoko! Hide! I be all about Pimp slappin fools with babypowder on ma hand, bustin caps.
     
  10. lordloki

    lordloki Guest

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    Wife works for RBC Mortgage,

    She says that chances are those houses your friends are renting out are investment properties. Under your district appraisals office and accoring to the note and deed. ie it was bought as an investment property.

    It is against the law to purchase an investment property and live there.

    Unfortunately, even if you owned the house for several years and had paid of the principle inteterst (PNI) you wouldnt be able to claim it, because it would not be an investment propety..


    Now she stipulates that unless its an apartment building, you cant claim it as an investment property.

    So to be honest, it sounds like your SOL with AOL.

    However, some state laws vary, so I would look into it with a local mortgage company, tax office, etc. Chances are they might not know a whole lot, if you can try to find an Underwriter to talk to. However, you probably wont be able to just walk in and talk to one. They generally can answer those questions.

    Good Luck
     
  11. SD_Ryoko

    SD_Ryoko <img src="\usflag.gif" align="left"/>&nbsp; Admini Staff Member

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    That would only make sense. It would be kind of a rip off if you could live in a house and claim depreciation at the same time.

    One guy at work has a rental duplex.

    The other guy has two houses side by side; One his, one rented.

    Both claiming dep.
     
  12. tsbhelper

    tsbhelper Small Business Helper Forum Moderator

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    SD_Ryoko,

    If you purchase the house for the sole purpose of renting it, you can claim depreciation on the rental property as an offset to the income you get from the rental. You can also deduct all repair costs for normal maintenance and upkeep. You cannot deduct the cost of any improvements you make.

    If you also want to use the house as your place of residence, and only rent out a portion of it to someone else, you would normally be prohibited from either depreciating the property or deducting repair and maintenance costs from the income you get from the rental.

    An exception to this is if you can physically separate your living space from the rental space. If you can make a separate "apartment" out of a part of the house, you can depreciate that portion of the house and also deduct a portion of any repair and maintenance costs which are involved in common usage between you and your tenant.
     

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