Can I rent out my permanent residence tax home while I take a 6 mo. contract position out of state that pays salary + per-diem?

[acewood77]

My home is in Texas.  The contract is in Missouri.  I expect potential tenants to probably sign a 1 year agreement, and as a result, I'd have to live in an alternate location while the tenants are there, then move back in after they leave.

[ToddL]

Yes, you can rent out your permanent residence tax home while temporarily working out of state. You will have to report the rental income on your tax return, but it won't have any effect on your Texas residency.

What makes you a resident? Generally, you're a resident of a state if you intend to either stay there permanently, or return there after a temporary absence. It's where home is – where you come back to after being away on vacation, business trip, temporary employment out-of-state, overseas employment, or school. Many factors are considered, not the least of which are where you are registered to vote, own homestead property and are licensed to drive.

[rizzanb]

The reprecutions from this potentially being Illigal makes me doubt/question the answer you were given by the turbo tax/tax pro. I would like to do this with my home and I am being told by many people it isnt legal. I guess I am just wondering... is it up to interpretation and if the IRS deems it fraudulant... it it?

[TaxGuyBill]

@rizzanb   Why do you think it is illegal???

You would obviously need to establish that the original city remains the "Tax Home", but there is nothing illegal about that situation.
<a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p463#en_US_2018_publink100033754">https://www.irs.gov/publications/...>

[rizzanb]

how long would you need to have lived in the state you claim is your perminant tax state? how long would you need to have owned the taxed home? in the industry I am in we work as subcontractors for the D.O.E. and when we hit the road, we do not know how long the job will Last some times, but we get the living expenses because we have the added burden of a mortgage we will incur. If we are renting it I am afraid they would say it's illegal. Are you 100% certain it is legal or is it up for interpretation?

[rizzanb]

the original city remains my taxed property but no longer remains my "home". because it is rented to another party. I am still invested in the community and have a license from that state and family there, if the renter terminates there lease I can move back, but I just dont want to get in trouble or loose my job or anything.

[TaxGuyBill]

If you are temporarily away from your "Tax Home", I am 100% certain that renting out your home is legal.

As for whether or not the original location is still your "Tax Home" or not, that is a fact-and-circumstances thing, and the link I gave you should help with that decision.

Read the link for what "Tax Home" means.  It has nothing to do with taxed property or an actual owned building/home.