In article , Kaushik
wrote:

I am buying a property in CA. This has total 7500 sq.ft. plot. About
4500 sq.ft. plot is availabe behind main house. I want to construct
another house on the plot, behind main house. Legally I will treat it
as in-laws apartments (I will take legal permit for the construction).
Once it is build I will move it the new house and rent the main house.
Rent received is illegal and not disclosed IRS. So I am not paying any
tax on rental income.

1. Do you think that this plan has hay loop holes, problems?

Yes...the part about not telling the IRS. That can put you in the
big house under the worst case scenario. Never screw with them
guys. Even if this is not a legal rental, the probability of the
local government ever doing anything about it is small.

Second, why not make it a legal rental? In most places, all you
have to do is get it inspected and have a rental license issued.
Also, check the zoning. But if this is zoned for single family
houses, a single family rental should not be a problem.

-john-

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John A. Weeks III 952-432-2708
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