second home

Forum|Forum|3 years ago
November 17, 2022
1 reply
5 views

My husband and I purchase a home for my mother in law to live in when rent prices were reaching out of control. The house was considered a second home because my mother in law is partially financially dependent on us for support. She pays $1100 a month for rent but my mortgage is $1650, each month we are in the negative $550. How should I file taxes with the purchase of this house? I do not want to pay taxes on her rent payments as income being I pay 1/3 of the mortgage myself.

melj1

Employee Tax Expert

Renting to relatives may be considered personal use even if they're paying you rent, unless the family member uses the dwelling unit as his or her main home and pays rent equivalent to the fair rental value. Refer to Publication 527, Residential Rental Property. https://www.irs.gov/forms-pubs/about-publication-527. Generally you can deduct the property taxes and interest on the property but, will need to follow the rules laid out in the publication link.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"