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?

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.

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.

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?

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

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.

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

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?

Technically the difference between fair market value rent and the insider deal rent would be a taxable benefit.

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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.

loop holes like that are great till you get audited... :2 cents:

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... :2 cents:

That was my understanding as well.

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.

That's the name of the game :thumbsup

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.

like others I claim a certain sq footage is for one of my businesses. good tax guy is essential.

Damn, Im going to look into this. Im always trying to use all profits up as much as possible, appologies, but why not? :2 cents:

This is very interesting, and yes, I would certainly only listen to my accountant and not some twat down the pub... nice one ottopottomouse. :thumbsup

:thumbsup

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.

As is my understanding, when doing deductions on your house in most countries youc an do your office, a bathroom and a kitchen.

see my sig

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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Same in AU, you can claim a deduction on home office expenses but only for the room(s) dedicated to the business.