u guys with houses.. renting to yourself..? save on taxes?

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  • xxweekxx
    Confirmed User
    • Oct 2002
    • 6780
    #1

    u guys with houses.. renting to yourself..? save on taxes?

    im curious, you guys with houses, etc paying mortgages with your after tax income..

    curious why you didnt just have your corp buy the house, furnish it, then rent it to you at a "lower rate"??

    or am i missing something here?
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    • kane
      Too lazy to set a custom title
      • Aug 2001
      • 20684
      #2
      Long ago I worked with a guy that did that. He set up an LLC and bought a house in the companies name. He then rented the house to himself for nearly nothing. He wrote off the payments on the house and expenses of the house as business expenses. This was a long time ago and I don't remember all the details of how he had it set up, but I do remember that in the four years I worked with with him he got audited by the IRS twice and he said it happened all the time.

      So if you are going to do something like this, you better make sure you have everything just right or you could get reamed.

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        • xxweekxx
          Confirmed User
          • Oct 2002
          • 6780
          #3
          right, cuz for example say you worked for microsoft, they could rent a house to you for $10/month, while writing the whole thing off..

          so you can technically do the same thing with your corp.. im even bringing this up cuz i was talking to an old friend today and he told me he didnt pay much in taxes for 09 even though he made a shit load of money... how did he do it?

          well he said his corp owns his house, furnishes it, etc, and he just "rents it" at a low ass rate
          his corp also bought a new bmw for him.
          he just pays himself a reasonable fixed salary.. everything else left he just reinvests in buying other businesses,websites, etc.
          so he pays taxes on his little salary, and the corp takes care of pretty much everything else.
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            • rowan
              Too lazy to set a custom title
              • Mar 2002
              • 17393
              #4
              Wouldn't the corp owning everything that you use in your personal life be considered a fringe benefit? Does the USA have fringe benefit tax?

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                • Phoenix
                  BACON BACON BACON
                  • Nov 2002
                  • 35475
                  #5
                  its still taxable benefits

                  id consult a tax professional man...it seems like a good idea but there is probably something we are over looking
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                    • Rochard
                      Jägermeister Test Pilot
                      • Dec 2001
                      • 75762
                      #6
                      I just deduct a large portion of my house.......
                      Herschel Savage
                      Brooklyn, NY

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                        • Barefootsies
                          Choice is an Illusion
                          • Feb 2005
                          • 42635
                          #7
                          Originally posted by Rochard
                          I just deduct a large portion of my house.......
                          Same here.

                          I do not know how much it is, but I was to say something like 900 sq feet of 2000 in my house is deducted on taxes. The two offices, and then half on some common areas where shoots are done.

                          However, I leave that shit for the accountant to figure out.
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                            • xxweekxx
                              Confirmed User
                              • Oct 2002
                              • 6780
                              #8
                              yeah i know i dont even wana do this.. just saying theres some slick people who make millions and pay nothing in taxes each year.. while the good guys pay taxes.lol
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                                • ArsewithClass
                                  So Fucking Banned
                                  • Mar 2007
                                  • 7957
                                  #9
                                  Originally posted by xxweekxx
                                  im curious, you guys with houses, etc paying mortgages with your after tax income..

                                  curious why you didnt just have your corp buy the house, furnish it, then rent it to you at a "lower rate"??

                                  or am i missing something here?
                                  Are you saying that you can get your own company to purchase the house & then as a paid employee, manager, director, producer, etc etc. The home can be rented from the business?

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                                    • L-Pink
                                      working on my tan
                                      • Mar 2005
                                      • 39151
                                      #10
                                      Technically the difference between fair market value rent and the insider deal rent would be a taxable benefit.

                                      .

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                                        • xxweekxx
                                          Confirmed User
                                          • Oct 2002
                                          • 6780
                                          #11
                                          Originally posted by ArsewithClass
                                          Are you saying that you can get your own company to purchase the house & then as a paid employee, manager, director, producer, etc etc. The home can be rented from the business?
                                          some people do it.. i guess they just purchase the house as an investment for the business.. i mean corps can buy properties, etc..

                                          then the corp rents it out to him for of course a low rate..

                                          then any rent he pays is considered income to the corp.. but of course its tough to even show a profit because the corp is down $500k on the house they bought, but only collected like $10k in rent for the year.
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                                            • woj
                                              <&(©¿©)&>
                                              • Jul 2002
                                              • 47880
                                              #12
                                              loop holes like that are great till you get audited...

                                              if you have multiple employees/partners/investors/etc corporation there is a possibility of it working, you could come up with a decent argument why it's a legit deduction, but one person corporation isn't going to work, the auditors are not idiots, they know all the tricks in the book...
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                                                • BestXXXPorn
                                                  Confirmed User
                                                  • Jun 2009
                                                  • 2277
                                                  #13
                                                  Originally posted by L-Pink
                                                  Technically the difference between fair market value rent and the insider deal rent would be a taxable benefit.

                                                  .
                                                  That was my understanding as well.
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                                                    • ottopottomouse
                                                      She is ugly, bad luck.
                                                      • Jan 2010
                                                      • 13177
                                                      #14
                                                      Originally posted by ArsewithClass
                                                      Are you saying that you can get your own company to purchase the house & then as a paid employee, manager, director, producer, etc etc. The home can be rented from the business?
                                                      Yes.

                                                      Using things that look like nice loopholes are fine as long as you set it all up properly and pay the tax on any benefit gained from not paying a full market rate for the rent. Get decent advice first (and not off of some twat down the pub) or HMRC are going to come round and start shoving pineapples up your arse.
                                                      ↑ see post ↑
                                                      13101

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                                                        • fuzebox
                                                          making it rain
                                                          • Oct 2003
                                                          • 22367
                                                          #15
                                                          Originally posted by xxweekxx
                                                          just saying theres some slick people who make millions and pay nothing in taxes each year.. while the good guys pay taxes.lol
                                                          That's the name of the game

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                                                            • PornMD
                                                              Mainstream Businessman
                                                              • Jan 2007
                                                              • 9291
                                                              #16
                                                              If the IRS thinks you're fucking them out of money, they WILL fuck you back (Miguel in Dexter reference, hehe). Even if it's a legal loophole or whatnot, they'll find a way to fuck you back, even if it's simply through audits and making your life a living hell. So it's no wonder your friend was audited 2 times in 4 years, lol.
                                                              Last edited by PornMD; 04-17-2010, 12:07 PM.
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                                                                • bDok
                                                                  Confirmed User
                                                                  • Feb 2005
                                                                  • 1917
                                                                  #17
                                                                  like others I claim a certain sq footage is for one of my businesses. good tax guy is essential.
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                                                                    • ArsewithClass
                                                                      So Fucking Banned
                                                                      • Mar 2007
                                                                      • 7957
                                                                      #18
                                                                      Originally posted by xxweekxx
                                                                      some people do it.. i guess they just purchase the house as an investment for the business.. i mean corps can buy properties, etc..

                                                                      then the corp rents it out to him for of course a low rate..

                                                                      then any rent he pays is considered income to the corp.. but of course its tough to even show a profit because the corp is down $500k on the house they bought, but only collected like $10k in rent for the year.
                                                                      Damn, Im going to look into this. Im always trying to use all profits up as much as possible, appologies, but why not?

                                                                      Originally posted by ottopottomouse
                                                                      Yes.

                                                                      Using things that look like nice loopholes are fine as long as you set it all up properly and pay the tax on any benefit gained from not paying a full market rate for the rent. Get decent advice first (and not off of some twat down the pub) or HMRC are going to come round and start shoving pineapples up your arse.
                                                                      This is very interesting, and yes, I would certainly only listen to my accountant and not some twat down the pub... nice one ottopottomouse.

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                                                                        • baddog
                                                                          So Fucking Banned
                                                                          • Apr 2001
                                                                          • 107089
                                                                          #19
                                                                          Originally posted by L-Pink
                                                                          Technically the difference between fair market value rent and the insider deal rent would be a taxable benefit.

                                                                          .

                                                                            Comment

                                                                            • HandballJim
                                                                              Confirmed User
                                                                              • Sep 2008
                                                                              • 4024
                                                                              #20
                                                                              if you have a sole proprietorship LLC it falls under your personal taxes when you file anyways. I think you might have an option to file separate but not necessary.

                                                                              my friend who is an accountant says that many people wright off all kind of shit and usually get away with it...but if you get audited you'll be paying it all back with interest and penalties.
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                                                                                • k0nr4d
                                                                                  Confirmed User
                                                                                  • Aug 2006
                                                                                  • 9231
                                                                                  #21
                                                                                  As is my understanding, when doing deductions on your house in most countries youc an do your office, a bathroom and a kitchen.
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                                                                                    • LoveSandra
                                                                                      So Fucking Banned
                                                                                      • Aug 2008
                                                                                      • 10551
                                                                                      #22
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                                                                                        • L-Pink
                                                                                          working on my tan
                                                                                          • Mar 2005
                                                                                          • 39151
                                                                                          #23
                                                                                          Originally posted by k0nr4d
                                                                                          As is my understanding, when doing deductions on your house in most countries youc an do your office, a bathroom and a kitchen.
                                                                                          Nope, incorrect in the US.

                                                                                          IRS regs state ... "Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly"

                                                                                          If the bathroom is enterable only from the office maybe. The kitchen, no way.


                                                                                          .

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                                                                                            • rowan
                                                                                              Too lazy to set a custom title
                                                                                              • Mar 2002
                                                                                              • 17393
                                                                                              #24
                                                                                              Same in AU, you can claim a deduction on home office expenses but only for the room(s) dedicated to the business.

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