Publication 15, Employer's Tax Guide, says only this much:...Payments for the services of a child under age 18 who works for their parent in a trade or business aren't subject to social security andMedicare taxes...No definition, and IRS publications are not really law anyway.

I think the ultimate situation for what I described above (not the plan, but a possible outcome) could look like this:Rent main house by the rooms while constructing ADU.

So the real answer is do what's comfortable for you and what makes sense based on your own financial position, your age, your desired outcome, and your local market.

To sacrifice a good tenant, which is hard to come by these days in favor of higher rent, may not be the trade-off that you need or possibly want.

What was the outcome?

Investors should fully understand that Section 8 is not a cure-all for Class C & D tenant challenges, it's just trading one set of problems for another.We see too many investors not doing enough research to fully understand all this and making naïve investing decisions.

I don't eat out a lot or go on fancy vacations (I do travel), I don't buy a new car every 4-5 years (I do keep it up, but my first car was ~20 years old when I traded it in this spring). 

What was the outcome?

Garland, pending the outcome of the Department of the Treasury’s ongoing appeal of the district court’s order.

In 2021, this property would have sold for $1.2M.While this, still, is hard to cash flow at a 7% 30-year rate, buying a property that used to trade at a 5% cap rate for a 7.5% cap rate is inarguably better value.