All Forum Posts by: Daniel Miller

Okay, I'll have to look back through their records and see if there is any info on what they spent on the improvements. Let's hope I found something when I went through her two full file cabinets of records and notes last summer! Most of the stuff was ancient notes and data sheets and got discarded.

Hi, Jon Holdman and Steven Hamilton II;
I appreciate the comments from both of you; this is clearly over my head, and I'm trying to get in touch with my regular attorney, without success yet - fortunately, I've got a few months before tax time, to work on this valuation.

The actual value of the house is complicated by several factors:
> they bought it in 197? for $75,000, house was (I think) 14xx sqft., plus 400 sqft detached garage.
> At somewhere around 1995, they expanded and added two rooms to the house and some to the garage, expanding them to 1977 sqft and 600 sqft respectively. Sadly, I found nothing amongst their records from that time, that would suggest what change in appraised value was due to this.
> At some later time (roughly 2000) they added solar panels, which are large enough to cover all electrical needs of the house.
> Appraised value of the house (per property tax bill) is $130,000 now.
> Market value in November (per zillow.com) was $790,000

So clearly I need somebody with more expertise to pull all this into a reasonable valuation for depreciation! I'm not even sure my estate lawyer is the right resource, maybe I *should* call a broker to look at this??

I have odd feelings about this, because our first two companion animals were actually acquired at places that I was renting; they were feral cats who seemed to recognize us as trustworthy people... in both cases, I ended up talking to the owner after we adopted them, and in both cases they just said "well, okay, but if they leave any damage, it will come out of your deposit", which was fine with us...

Okay, thanks for the inputs... I've already been talking with an attorney about various issues related to him; I'll contact her about this issue and see what she advises...

Okay, I searched these forums for this question, but none of them quite addressed my situation, and in the meantime, the more I read, the more confused I got!! So please permit me to ask this question from scratch:

My father owns a house in San Jose, CA. He has dementia and is living elsewhere now. I am his legal agent and am renting out his house (after considerable wise advice from all of you here!!). All is going quite well.

However, I am confused about tax issues. When I did his taxes for last year, I disregarded depreciation completely. The reason was that they asked for the "cost basis" of the house, and I chose not to deal with it then (since it had only been rented for two months, and I had so many new issues to deal with).

However, this year I will have a full year of rent to declare, and I'm going to need some big deductions to offset that. So I need to clarify what the cost basis of his house is.

A friend of mine who also rents out houses told me that I could go to county records and find the cost basis there. The only value that I can find in his property information is "assessed value", but from reading past messages here, I've read conflicting information about whether that "assessed value" is the "cost basis", or not??

My parents bought the house in 1974, and it falls under Prop 13 protections, which means its assessed value has not changed much since they bought it, for something around $74,000... however, they've done extensive improvements and expansions to the house over the years, which probably alter the cost basis considerably, true??

So I would appreciate any advice or pointers that anyone could offer!!

Thank you again for all your excellent past and future assistance!
Dan Miller
San Jose, CA

Okay, I'm going to view this in the context of: The only reason I would consider this situations is one or more of:
1. I can't get simpler applicants on my property, and must take what I can get, or
2. I can financially afford some risk, and I morally believe in giving young folk a chance in life.

In either of these cases, I think that Steve Babiak's vision offers some benefits over Michael B.'s; I think I would try to sit them all down, point out my reservations about the situation, explain to them why I'm giving them a chance, and then require them all to initial the "joint and several" statement... the point being, that I'm offering them all an opportunity to demonstrate their adult responsibility. Then, I let them sign the Lease, understanding that each of them has accepted the responsibility for their actions... and then I grab the dice and run, hoping that my faith in humanity is upheld!!

Okay, I'm stating this flippantly, but if my initial assumptions (about why I'd be here in the first place) are valid, maybe this is a reasonable gamble... after all, when I was 22, people *did* trust me with their homes...

Michael B.: but then what happens if that person is the one who breaks up with his/her companion and moves out in a huff?? It seems like that leaves everyone hanging...

I suspect that's where your thought of "pick the best one of the bunch" comes in... but I suspect that the accuracy of my judgement of people won't win any awards in animal science, so to speak...

... which probably *also* argues for just avoiding the situation entirely...

Well, I finally rented out dad's house to a nice family; they are stable, have very good incomes, excellent credit, are moving out of a smaller house into dad's larger one. I spent some time with them and they are very nice people, I think this will work out well. I have a signed lease and cash in hand for deposit and first-month rent.

When I think of how ignorant I was, just a couple of weeks ago, and the traps that were put in front of me regarding the first questionable prospects, it is just chilling!!

I have to thank all the friendly, knowledgeable people on this forum who have been advising me, telling their experiences, and just discussing options and ideas, so thoroughly! You turned a terrifying experience into a fairly manageable one! Thank you all once again...

Have a joyful holiday season!!

Wow, Kyle J., Thanks!! There were a couple of things in there that I'd forgotten about!!

Jon K.: They have been living separately and managing their debts separately up until now. Her terrible credit record for *years* showed that she was not managing it very well. In the two months of banks statements that I had from her, her bank balance fluctuated from around $700 to around $2100, and her income was comparable.

The reason I disregarded her income in looking at the combined package, is because I was trying to get a "worst case" cash-flow image in my mind for them. If he had a couple of months of higher expenses at the same time that she had a couple of low-income months, it looks to me as though they would have trouble paying the rent...

I tend to agree with the message implied in your comments here; I think this house is too expensive for them to safely commit to... I had decided earlier to sit on their application while I considered my other options; fortunately (I shouldn't say this before the papers are signed this afternoon!) I've found a better-looking (economically) family and have accepted their application.

I'll sure be glad when all this is over (well, for the time being... it won't actually be over until I'm dead!!)