Rent my primary residence to myself.

[Derek Smith]

Hello everyone, 

Ever since the new tax laws went into place where you have to be uber rich in order to write off your mortgage interest. I've been trying to think of ways to move my mortgage to my investment properties so I can continue to write it off.

All options I've come up with either 1) drain my savings, and or 2) increase cash out every month. neither is a really good investment considering my 3.75% 30yr mortgage.

BUT....

This morning I had an idea that I could turn my primary residence into a rental, and just rent it to myself.

Yes, this would mean I would incur additional income from the rent, but I think that would be more than offset by depreciation, interest, taxes, repairs, etc. Showing a net loss and reducing my taxable income.

What are the legal/ ethical dilemmas of doing this? i did some research and it looks like the uber rich already employ this strategy.

Would I need to form a LLC and transfer ownership? (I don't have my other rentals in an LLC) Or can I just draw up a lease and voila?

What am I missing/ not thinking about here?

[Dominick Austria]

@Derek Smith simply put you can’t do this. You also didn’t lose any benefit. It actually sounds like you gained since you can’t itemize anymore.