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Investors & landlords
The remodeling adds to your cost basis, and while it will matter for depreciation purposes on the rental portion, it will make it's biggest impact in the future, when/should you ever sell the property.
But first, are you actually renting to someone whom you would refer to as a tenant? Or would this be more aptly described is you helping out a friend where in reality, you're just "sharing expenses" ? If the later, reporting the income as rental will not really benefit you that much - especially if you're not charging within the range the fair market rental values in your area.
May 31, 2019
10:09 PM