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Cp11772
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Tax dedications for family rental?

Hello,

We own a second property that is a two family home, where 5 of our family members live. In one unit, my sister takes care of our elderly mother and the other unit my sisters lives but does not have a job. They pay around $1000/month, meanwhile the property value is around $5000/month to rent. Because of this, we lose a lot of money with taxes. Is there a way to file so we don’t pay as much?

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2 Replies
Cp11772
New Member

Tax dedications for family rental?

OP: Update they pay around $1000 in total for the whole house per month. 

Tax dedications for family rental?

based on what you have provided, the tax laws say the use is 100% personal. (this is due to renting at less than Fair Rental Value)

taxes on the property paid by the owner is deductible on Schedule A. However, the deduction for taxes for a taxpayer is capped at $10,000 per year ($5,000 if married filing separately). mortgage interest if a qualified residence would be deductible on Schedule A subject to the rules for deducting interest on acquisition indebtedness.

 

qualified residence - first or second home and the home is security for the mortgage.

 

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