Confused situation and getting different opinions
I have two houses. I refinanced house A to pay cash for House B as a vacation house which has become my permanent residence. I have a sister that rents nearby.
until recently, I had a different relative living in house A for free. He was helping to care for elderly parents who live nearby.We are looking to move back to house A for a year in order to provide care for elderly.
We would like to rent our beach house to my sister at a rate below our costs (refinance mortgage, taxes and insurance) and well below the market value. 2k vs 3.5k. The house will be unoccupied except for weekend visits if we don’t rent to her. We would still stay at the house a couple weekends a month. She would be paying less than her existing house, but in a much nicer location. Utilities would stay in our name.
The tax stuff has confused me, to the point that I am not sure if we should do it.
Any guidance would be appreciated.
Thank you
