Live in multifamily taxes???

Question

Ok so I live in a duplex, and rent out the other half.

1. My CPA is telling me we will deduct 50% of the shared expenses on the building the rest is considered my housing costs.

2. I was reading somewhere that the correct way to file live in multifamily is to charge myself a fair market value to live there to the profit side and deduct all of the expenses to the cost of the investment.

What is correct 1. Or 2. ?      Or both???

I hope this is clear what I'm asking.

I'm not sure my CPA is familiar with rental properties or not.  Just want to feel this out with the BP community on if it's time to look for a new CPA.

Steven Hamilton II · Answer

Joshua,

Number 1 is correct. YOu must log the expenses that are solely the rented half. The rest of the shared expenses will be split based upon square footage.

Do not feel like you need to use someone local. Many of us accountants have clients worldwide. Payroll, bookkeeping, etc can mostly be done remotely.

Here is a great list of questions to ask a potential accountant:http://www.biggerpockets.com/forums/51/topics/70447-questions-to-ask-a-cpa

Also check out the www.NAEA.org page in your search. It should help you find someone local. If someone comes to me, I'll send them your way.

If you need help in your search or want to verify something don't hesitate to ask.

For example: I have clients worldwide and things are just as easy as I e-mail them, talking on the phone. I even use Skype and Google Talk to communicate with clients so I'd highly recommend looking for one of the best with great references that interviews well with you. So look for someone you can connect with that works out for your situation.

Joshua D. · Answer

Wow, thanks for the great reply!