All Forum Posts by: Sheri R.

I am thinking a rent to own contract and applying all rent toward my son owning the house at the time I recoup my  100k purchase cost. Any potential tax problems for me or my son in doing this?

Would above arrangement be better or worse tax wise versus treating as a business and depreciating? I don't foresee selling the house in next 10 years unless something happens to son living there. 

I will try to "explain myself better"

I am closing on a 100k home next week. I purchased the home for my son to live in. He may or may not be able to make the payments to me. The mortgage, taxes and insurance will be paid by me. He will live alone in the house. I have my own home. I am going to tell him what I need monthly to pay the homes expenses and mortgage. I am trying to determine how to handle this to my financial advantage. Should I get a rental contract for him to sign. Keep all expense records and consider it a rental for profit, claim rental income and use expenses as tax deductions or use any money he gives me to pay down the mortgage. I am not trying to make a profit. Just give my son a place to live and pay the expense of the house he lives in

Yes, he is immediate family member

I will be paying cash. He will live in the house alone. I will be paying the tax and insurance. Hopefully he will be able to reimburse me for my expense by making monthly payments to me. I am unsure whether I should report what he is able to pay me as rent and try to deduct expenses to maintain the house. Or just use whatever he is able to pay me pay the expenses of the house and anything more to recoup the cost to me buying the home, about 100k. 

I am in contract to buy a second home. My son and family will live in the home. My problem is deciding how to title the deed. He has a job and makes a decent income, but has unpaid hospital bills of 100k because of a hospital stay with no insurance a few years ago. He also owes federal and tax bills of about 50k. He has been irresponsible in the past. The past few years I have seen improvement, But he has not completely recovered from past mistakes. If I title the house in my name, there is a $7000.00 yearly property tax increase and a $1000.00 yearly insurance increase because I will not be residing in the house. If I title the house in his name, I am concerned he will loose the house to creditors who. I have considered LLC or revocable trust in my name. I plan to talk with an attorney about this before closing. Ideas from the BP community before talking to an attorney will help guide me.

Thanks for the information. When you say depreciation. Do you refer to just making up for the depreciation of the house by the rent money or using depreciation by claiming depreciation on my personal tax return. I am not tax wise nor am i experienced in being a landlady.  

I am closing in three weeks on a 5 bedroom 4 bath home. I'd like to get 2 or 3 roommates to help me with the mortgage payments. Any tips on how to do this as far as  federal tax returns, what I can deduct, what I have to claim as income? Any problems with zoning issues for having non family members as roommates, whether i should have them sign leases? etc. I have never rented out rooms or owned a house before and all advice appreciated .

I am in the process of purchasing my first rental. When I went to zoning/code enforcement, the administrator told me that if they got a complaint about property being rented out in violation they would look into it. They don't usually act without a complaint. Property rented to a family member can be ok even if the area is not zoned for rental to others.  As far as code violations, I was concerned about additions/work done by previous owners not permitted and inspected. Again, I was told that when a property changes ownership there are no inspections done, except new construction being occupied for the first time require inspection before occupancy.  This is general information not specific to all jurisdictions and varies depending on who the person i have talked to in my jurisdiction.  

My son will be living in the house and may have room mates. If action is brought against my son, I don't want legal responsibility. I will insist on adequate insurance.

If i put the house in my name, can i rent or lease the house to him without recourse from  anyone subbing from him.

If i put both our names on the deed, are we equally liable? I would like to keep control of the house if possible.

The house was built in 1972. There has been several additions made to the house, some possibly without permit. I checked with code enforcement. They could not tell me if there were any code violation or permits issued. They did say there would be no city inspections just because the ownership changed. If i find un-permitted work and wanted to correct the work and asked for a permit then they would send out an inspector. I am getting educated in handling my first ever rental. Is the greatest problem,reselling the house if there was unpermitted  additions to the house  that don' meet code. In talking to city zoning and code enforcement, it seem like they care much about improper past work on the house.

Some background: Property was foreclosed on by the bank, the mortgage holder. The property did not sell at court auction and was then owed by the bank. Bank listed property on auction.com as bank owed reo. I find out whats going on from my daughter. Daughter lives in the house and has been notified eviction notice from the house within two weeks. The property was owned before foreclosure by mother of daughter( my ex-wife divorced in 1973). Around 2009 a dispute between my ex-wife and the bank started. Accusations made by ex-wife that someone at the bank had forged her name on second mortgage documents. Ex-wife stopped making house payments in 2009 and the dispute continued until foreclosure a couple months ago. Ex-wife has medical problems and daughter moves in with her to look out for her. I decide to help daughter stay in the house when I find it listed on Auction.com for bank owned property sale. Next day I go to court house and find two IRS liens against the property amounting to $300,000.00. The 2 day auction begins the two days later and I won the bid. Because of the Christmas holidays, I was unable to see attorney for advice. I made the offer and won the bid realizing that I could back out of the purchase and loose $5000.00 in earnest money and Auction.com fee.To further confuse me, I learn that my ex-wife is is the middle of Chapter 7 bankruptcy proceedings and her next hearing is 3 weeks away. I am hoping that I can complete the purchase for my daughters sake. Hoping the IRS liens have been discharged prior to the bank selling it to me. There are also a few other potential problems I face if I proceed with the purchase. I won't go into those now. The IRS liens worry me enough for now. Hopefully, I will get some feed back  and guidance from BP members.