I am looking to buy a condo to rent it out while i am renting my self, this seems to be a odd thing. but I want to build my equity while i could accumulate to buy a house for my self. I am concerned about the taxes, since i myself is paying rent do i owe taxes on the rental income?
Also the state i live in there is property tax subsidy for homeowners for their primary home, would i be able to qualify for that on my property if i am not living in it?
I searched this question and didn't found it posted...
any input is appreciated. Thanks
Yes, you'll have to pay taxes on your rental income (minus any deductible expenses of course) because it's income. The fact that you're personally renting doesn't change that.
As to your second question, it doesn't sound like you'd qualify for the property tax subsidy since it's not the prImary home where you reside. Usually those types of property tax subsidies/exemptions are for properties you actually live in and you'd likely have to sign something attesting to that fact in order to be eligible.
If you are a sole proprietor, rent income to yourself is still income so it shouldn't have a benefit. If you own the building in some sort of corporation then you are still having income and may have corporate tax depending on how you structure it.
As for tax benefit, you get to write off loan fees, loan interest, and depreciation of the residence. Zeros out rent income and gives you a tax return.
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