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Here is a new twist in the rental
business. I have tried to keep my rents fairly low for my good tenants for
obvious reasons. They tend to maintain their houses better and I do not
have any turnovers. There tends to be more physical damage to a house
during a move out then damages caused when the tenants actually lived in
the house.
Well one of my CPA's that does my tax returns just
informed me that I had better keep my rents at at least 80% of market rent or I
am subject to some sort of increased tax and or penalty by the IRS. I
would have to say that about 30% of my houses are rented at less than 80% of
market rent. So to protect myself, he advised me to raise
rents, all thanks to the IRS.
A few years back, I found out that I have to
charge interest to a relative when I loan money. The IRS charged me on the
"imputed" interest that I should have been charging, even though I never
received it. Here are the latest rates that you have to charge relatives
on loans: 3 to 9 year loans - 4.99%, 0 to 3 year loans - 3.21%. Talk
about Big Brother!
Steve Meldahl
Jordan (work)
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