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Updated over 4 years ago,
below market rent to family member in paid off property- yes dumb
Hi, here is my dilemma.
i have a paid off property that i've been "renting" to a family member since 2014. file a schedule e every year and take depreciation but thinking that may be wrong. since the property is paid off, i only pay for and deduct the property tax, hoa and depreciation.
can i- claim the property as a second home instead, stop taking depreciation and stop reporting the below market rent as income? i don't have a mortgage and family member does own minor repairs.
i want to sell the property in the near future- 1 to 4 years. i'd rather stop taking the yearly depreciation and avoid the depreciation recapture.
i have a regular w-2 job and another triplex that i do manage and rent at market rate.