All Forum Posts by: Dan Bennett

Hi Folks,

My first investment is a duplex in Oakland, CA and I'm house hacking.  There's a law here in Oakland that says any income I receive from my tenants is taxed.  I'm currently paying all the utilities because the units have shared meters, and we have worked out percentages of the utilities that each unit (mine and the tenants')  are responsible for in the lease.  When a bill comes in, I share it with them, and they re-imburse me for their contractual percentage of it.

I just wanted know if anyone knows if there's a legal way to not treat the payment I receive from the tenants for the shared utilities as 'income' given that it's really a loan that I give them, and they are just paying it back.

Any locals with experience that can help a newbie out?

Thanks for any insights!

-Dan

@J. Martin I read that you might be a local expert, not sure if this will reach you or not.

Hi folks,

I recently purchased a duplex, am occupying one unit and renting out the other.  Everyone seems to recommend separate bank accounts for the business (as landlord, collecting rent, paying expenses, repairs, etc) and personal.

My question is, since I live in the small unit (maybe 40% of the sq footage of the building) and rent out the other 60%, it's unclear which account I should use for the roof replacement that is going on right now.  My understanding is that I'll be able to get a tax break on 60% of the cost at the end of the year.

I also assume that it's best to pay for the repair out of the rental business account if I can, but I'm not really sure:

1. Since my renters are just moving in, they haven't paid enough into the business account to cover 60% of the roof repair.  Should I fund this account with personal money, and then pay out of this account?  Or should I just track this expense outside the business account (pay from personal, but write off 60% anyway)
   1. The roof is the first such issue, but there are others as well that have me in a similar situation.
2. The two units share a few utility meters, should I pay utilities out of the business account or personal?
3. Should I be paying 60% of each expense from the business, and 40% from the personal account?

Also, the unit is my primary residence, and it's in Oakland, CA if that has any bearing on the situation.

Thanks for any insights!