Lender · Pasadena, CA · Member since 2015 · 16 posts · 2 votes
I am in the process of purchasing a personal residence and my broker came across an interesting property. This property is a SFR with a "guest house" on top of the detached garage. Would this property technically be considered a duplex? The "guest house" rents for $1,000 a month. How would that income be considered or taxed? What could I write off or use as a deduction? Would other considerations or tax implications can this property have?
The income from the "guest house" would be rental income reportable on Sch. E. You could write off a portion of property tax, insurance, mort int. You would also depreciate that portion of the property. There are other deductions that are possible depending on your individual situation.
Consult your tax advisor for specifics that apply to you.