Second Home -> Investment Home
I've had a TH in Raleigh since 2007 that I purchased as a second home for my visits to family. My mother also stays there. In the last couple of years, I've gotten married and had a son. Too many of us now to take the top bedroom on visits and we have to AirBnB it. My mom covers my mortgage and HOA in exchange for living there, but she only pays the minimum to cover the bills. Market rent is roughly 2x what she's paying.
I've recently questioned whether I should just convert this to a rental for tax purposes. I do a lot of work on the house, travel to the house, etc and it would be very advantageous to get those tax breaks. Does this sound like a good idea? Can my bank call the loan if I change the status or is the statue of limitations on that up? I've searched around, but aside from what you claim on your tax returns, I'm not aware of anywhere else this needs to be made known. Does the fact that my mom isn't paying market rent disqualify it? If so, what category is this house if I don't stay in it any more?
I see my CPA in a month, but I was wondering if anyone here had ideas on a way to make this place do more work for me. Thanks! :)