You can rent to yourselfbut the benefits of doing so may depend on what your entity structure looks like. Additionally,you will need to understand the self-rental rules. These rules will basically make it difficult for you to claim the net taxable loss (if any) caused by your self-rental.
People also ask
Should you rent to yourself?
Renting to Yourself Could Create a Mess In The Future Even if you were to run your self rental at a break-even you would still run into major tax problems in the future. If you have a self rental then chances are you檙e taking a depreciation deduction on your home to offset the rental income.
Can I put my home in an LLC and rent it to myself?
Let say you want to put your home in an LLC and rent the home to yourself for $1,000 per month. That $1,000 per month is not a deduction on your personal return and is instead rental income on your LLC.
What if I didn’t have a self rental?
If you didn have a self rental but instead owned the home you would be able to sell the home tax free. If you lived in the home for 24 months out of the proceeding 5 years you would may be eligible to deduct up to $250,000 in capital gains ($500,000 if you檙e married filing jointly) from the sale of your home.
Can you sell a home without a self rental?
Even worse, when you sell the home you will have to pay tax at ordinary income tax rates on the lesser of the gain from the sale or the depreciation previously taken. If you didn have a self rental but instead owned the home you would be able to sell the home tax free.