In this quick yet insightful episode of Dr. Friday Tax Tips, Dr. Friday, the president of Dr. Friday’s Tax and Financial firm, delves into the complexities of renting out property to family members. The episode tackles a common dilemma faced by many: can you claim rental deductions if you’re renting out your house to a relative, like a son or daughter-in-law? Dr. Friday explains the importance of fair rent, profit intent, and the limits of deducting expenses when you’re not aiming for a profit. This one-minute moment offers a concise yet comprehensive overview of how to navigate rental arrangements with family members to ensure you’re maximizing your tax deductions. Don’t miss Dr. Friday’s valuable insights, especially if you’re in a similar situation. Tune in for more expert advice!
Transcript
G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.
Renting your house seems like a pretty easy concept. You rent it, someone rents and you have it. But sometimes you know what? Your son or your daughter-in-law or somebody needs to rent the house from you. Can you actually deduct that as a rental? And that will really depend on the situation. Are they paying you a fair rent? Are you trying to make a profit on that rental? Or are you basically just having them pay what the mortgage is? Because if that’s the case you can only write off up to what your expenses were. You can’t take it into a loss. But if they’re really paying rent just like anyone else, it’s a true rental. Making sure you maximize your deduction is what any good tax person should do.
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