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?
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.
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?
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.
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.
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.
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.