Tiny House: foundation or wheels

[Dave Meyers]

I'll be purchasing a Tiny House for short-term rental income. Due to zoning laws 'wheels' would classify it as an RV whereas a placing it on a foundation could classify the structure as a Single Family Dwelling. 

Is placing the Tiny House on a foundation the only way to gain the tax benefits of Real Estate Investing?

[Julie McCoy]

There's lots to unpack in your question.  Real answer: ask your CPA.  I don't honestly know if it matters tax-wise if it's classified as an RV or a permanent dwelling for purposes of writing off rental income etc.

However, before you proceed make sure you carefully look into the local zoning laws, which can be a catch-22 for tiny homes.  In my research, most permanent dwellings (on foundations) need to be at least 400 square feet, and tiny homes are frequently smaller than that.  If it's classified as an RV, you don't have that restriction, BUT many places have restrictions about how often an RV can be "lived in" in one particular place.  You'll likely be in a more favorable position if it's parked on land where there's an existing permanent structure (like your primary residence).  Most zoning commissions will not allow RVs to be parked on bare land, with certain exceptions (e.g. for periods of up to one year IF a permanent residence is actively being built).  

There are lots and lots of tiny home specific webpages and blogs that discuss these issues in depth; I encourage you to look into them, as they'll likely have more specialized knowledge than you'll find on this forum.