Welcome Guest. Register Now!  


Itemized Deductions Schedule-A


Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 02-16-2014, 09:36 AM
Junior Member
 
Join Date: Feb 2014
Posts: 1
Rental property converted to second home

In addition to my primary residence, I own a condo that my disabled son rented for three years. For the past two years he has been unable to pay rent. Can I claim this condo as a second home and deduct the interest and taxes?



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 02-16-2014, 10:23 AM
Moderator
 
Join Date: Oct 2010
Posts: 5,134
Quote:
Originally Posted by bukaspop View Post
In addition to my primary residence, I own a condo that my disabled son rented for three years. For the past two years he has been unable to pay rent. Can I claim this condo as a second home and deduct the interest and taxes?
then,aslongas the fair rental value if the condo exceeds $14k for 2013, you MAY need to file gift tax return form 709 with the irs as your son lives in at no cost. The difference between what your son must actually pay and what you need to receive at fair rental rate is a gift to him from you.In general, parents should charge their adult children rent if an adult child lives in the parents' home or in other property the parents own. No, you can not. In order to deduct rental property expenses in excess of income you need to charge a fair market rent on the condo. as your rental income is $0, you can’t deduct expenses: as you are not charging rent, it is not a rental property.yur s child would have to be paying fair market value rent in order to take other deductions.

since this is yoursecond home that you own you can still deduct the mortgage interest on Sch A of 1040. You can also deduct the property taxes on any number of homes that you own on Sch A of aslongas you itemize deductions on yur return. Repairs and maintenance are not deductible. If m not, then yu can’t deduct them.

Note; in general, it's perfectly legitimate to rent to your child but any time that there is any question about this being an arms length transaction you need to keep records on what similar properties rent for on the open market to prove that you are collecting a market-based rent. Any time you rent for less than market rent, whether it's to a family member or anyone else, your expenses are limited to the revenue that you received.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Cost basis of rental house converted from investment property Sammie Rental Real-Estate 3 09-05-2013 10:04 PM
How to treat sale of Investment real estate converted from Rental Property. Chas002 Rental Real-Estate 1 10-13-2012 05:23 AM
Capital Losses of Home Converted into Rental Property garllh Rental Real-Estate 4 07-20-2011 01:29 PM
Can Suspended Losses from Rental Property converted to Personal Residence be released upon sale of another rental property? mountainaire Rental Real-Estate 1 04-05-2011 03:59 AM
Second Home was used as Rental Property workout Rental Real-Estate 1 02-06-2009 10:06 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning