Can you turn rental property into a business for taxes

Hi everyone. Has anyone tried turning a rental property into a business to get tax benefits? Curious if this is possible.

Rental properties aren’t considered businesses under the tax code.

Dustin said:
Rental properties aren’t considered businesses under the tax code.

Is there a way to make it one?

Rowan said:

Dustin said:
Rental properties aren’t considered businesses under the tax code.

Is there a way to make it one?

No, not as it stands.

Dustin said:

Rowan said:
Dustin said:
Rental properties aren’t considered businesses under the tax code.

Is there a way to make it one?

No, not as it stands.

I’ve seen online that it might be possible?

@Rowan
The tax code says otherwise. It doesn’t allow it.

Dustin said:
@Rowan
The tax code says otherwise. It doesn’t allow it.

Interesting.

Rowan said:

Dustin said:
@Rowan
The tax code says otherwise. It doesn’t allow it.

Interesting.

If you turn it into a short-term rental, like a vacation property, it functions more like a hotel. But you won’t get extra tax benefits for doing that.

@Dustin
What about transferring ownership to an LLC?

Rowan said:
@Dustin
What about transferring ownership to an LLC?

That won’t change anything for taxes. A single-member LLC is ignored for tax purposes. It’s treated the same as if you own it directly.

Rental property isn’t a business, but you can still claim a lot of the same deductions businesses do.

Rylan said:
Rental property isn’t a business, but you can still claim a lot of the same deductions businesses do.

Can you give examples? I’m a new landlord and still learning.

Rowan said:

Rylan said:
Rental property isn’t a business, but you can still claim a lot of the same deductions businesses do.

Can you give examples? I’m a new landlord and still learning.

Sure. Repairs on the property, property taxes, interest on the mortgage, and depreciation on the building itself are all things you can deduct.

@Rylan
I’ve heard it can be tricky to know what counts as a repair for rentals.

Rowan said:
@Rylan
I’ve heard it can be tricky to know what counts as a repair for rentals.

It’s not as complicated as it sounds. I’d recommend getting a good book about being a landlord. It’ll explain this stuff in detail.

@Rylan
Thanks for the tip. I’ll look into it.