Not sure the best way to handle this situation - do I have the options correct, missing anything great?
Intended primary house purchase has leaseback of greater than 1 year. Expenses are considerable, but rent income will exceed. Debateable whether or not it was done "for profit".
Available options:
1. Other income on sch 1, line 8 - but pub 527, p16 and pub 535 p6 seems to strongly imply if this approach is taken that expenses CANNOT be deducted against rent as it isn't "COGS", that only sch A could be used (and given tax law changes, itemization isn't viable)
2. Do a schedule E in order to claim expenses but have exposure to recaptured depreciation hit and future possible home sale recapture nonsense (painful, but possibly best recourse)
3. Reduce home basis by income net of expenses -- even though leaseback was in original sales contract and first month rent included at closing this seems particularly murky especially for such a long duration (and is typically "professional opinion" and not in IRS documentation)
4. anything else I'm missing?
Saw this post but wasn't sold on it: https://ttlc.intuit.com/community/taxes/discussion/how-to-handle-a-leaseback-on-a-new-home-purchase/...
