I am looking into buying a house/apt that I can live in for 3-5 years, and then start renting it out.
I know there are some complications around depreciation if you SELL the property after claiming the deduction. I was wondering if the same holds true for a home office that ultimately gets turned into a rental property.
1. Are there any tax consequences of claiming a home office deduction for 3-5 years and then renting the property to tenants? I would no longer live there or do business there, and likely begin to claim home office in another residence.
2. I don't completely understand the consequences if you were to sell - is this only if you claim depreciation as an additional expense? Or does it also come into play when you are just deducting the traditional % or simplified $5/sq ft methods as well?
3. I know I can write off interest on the mortgage. Would I ever have to pay anything back if I wrote off interest on my mortgage and then either sold or rented the property?
Thanks!
I know there are some complications around depreciation if you SELL the property after claiming the deduction. I was wondering if the same holds true for a home office that ultimately gets turned into a rental property.
1. Are there any tax consequences of claiming a home office deduction for 3-5 years and then renting the property to tenants? I would no longer live there or do business there, and likely begin to claim home office in another residence.
2. I don't completely understand the consequences if you were to sell - is this only if you claim depreciation as an additional expense? Or does it also come into play when you are just deducting the traditional % or simplified $5/sq ft methods as well?
3. I know I can write off interest on the mortgage. Would I ever have to pay anything back if I wrote off interest on my mortgage and then either sold or rented the property?
Thanks!