Other Tax Questions
Questions and comments on other topics covered in Fairmark.com, such as UTMA accounts, and any tax questions that don't fit our other categories.
Rental off market
Posted by: Hankj, April 7, 2017 09:13PM
In 2016 removed one of my rentals from active market and to use as guest house and a sometime place for guests coming to work in a not-for-profit museum (501c3) However I will not charge them rent.
How do I handle on taxes. Just not show the address any more? I realize no expenses will be able to be deducted (bummer), but except that fact.
Thank you

Re: Rental off market
Posted by: triad, April 7, 2017 09:38PM
Just stop doing the schedule E. Any suspended passive losses stay suspended.

Re: Rental off market
Posted by: Hankj, April 7, 2017 10:08PM
Thanks - then just restart doing the schedule E if(or when) I put it back on the market?

Re: Rental off market
Posted by: Drewremedy, April 7, 2017 10:50PM
I think wth some creativity and a few rentals carefully structured even if well below market ..but NOT to relatives... you cold meet the rules for being in service

Personally I'd be more nervous about free rentals to employees as a form of taxable compensation

Re: Rental off market
Posted by: Hankj, April 8, 2017 02:16PM
It would be used as a meeting place for the 501(c)3 Non-profit organization, but only 3 - 4 times a year.

The people who would be staying are not my employees, but of the non-profit. I suppose I could charge the non-profit the going rental rate and just give the money back to them - I've seen gifts of "in-kind", but haven't really understood that.

Re: Rental off market
Posted by: Drewremedy, April 9, 2017 11:13PM
WEll with attention to detail and honest actual payments and leases and keeping business like records and keeping your right hand away from your left pocket ...one could enter into a lease with a 501c3 on a long term basis perhaps,on the light side of FMV ..but defendable as intended to make a profit .

IF from time to time you make actuall cash gifts to that charity , nomwink wink deals,

I'll bet it flies

IT might be nice to,have distance or insulation between roles as LL and donor and not look like you are dealing with yourself..

Re: Rental off market
Posted by: Hankj, April 10, 2017 12:43PM
It is interesting idea. I rented for a wk to an instructor for a workshop the charity was sponsoring and asked for no payment. I've hosted meetings and gatherings (appreciation dinners) not sure how this would be as a "hobby business". or even if it would be. It would be nice to make money, but feel 'cheap' asking the charity for payment. :)

Re: Rental off market
Posted by: triad, April 10, 2017 04:46PM
Stop. The IRS will blow you away on an audit.

You cannot do fake rentals in order to claim expenses or use up passive losses.

Re: Rental off market
Posted by: Hankj, April 10, 2017 06:00PM
Thanks - I had heard about "hobby business expenses" so was wondering.

Took off the rental market & will use as second home -luckily can deduct the real estate taxes if itemize. Perhaps will put back on market - if the market turns around or it becomes too cost prohibitive to use for self or as donated space for the charity.



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