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Updated about 2 years ago,

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Sam Yap
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20% pass through for house hacking

Sam Yap
Posted

Hey folks, long time lurker and ive stumbled on a something I can't quite figure out. My situation is fairly simple. Just a SFH with 2 rooms being rented out to long term tenants and I am trying to make sure I maximize my tax deductions.

I've read Brandon Hall's awesome article on the 20% pass through deduction and was still a little confused as to whether a house hack would qualify for this deduction. There's a snippet that mentions if the property is used for personal use for more than 14 days, it disqualifies the use of the safe harbor. However, from my understanding, house hacking is essentially splitting a property into two parts, business and personal. Does that mean if I rent 2 rooms out for the full year it wouldn't be disqualified? Even without this safe harbor, I suspect it could rise to the bar of a business as I repair, collect rent, and maintain the home by myself but I'm not 100% confident.

Greatly welcome any input on this and any other non obvious tax deductions such as the De Minimis safe harbor and Safe Harbor for Small Taxpayers for buying things such as couches and TVs for the common areas