Home Ownership (misc.consumers.house)

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Kaushik
 
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Default Illegally renting main house and living in another house built on back of the house on same plot...

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?
2. Has anyone done this? Do many people do this?
3. Any tips on negotiating mortgage for buying and construction?
4. What would you do if you have 4500 sq.ft of plot available behind
your main house?

-Kaushik
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J T
 
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When you say rent received is illegal - do you mean it's not legal to rent
this property for some reason, or that you are planning to hide your rental
income to avoid paying taxes? If the latter, you should be aware that rental
properties can be a trememdous tax shelter. There's probably not much
incentive to hide the income. You can write off all sorts of things related
to the upkeep of the property and depreciation.

"Kaushik" wrote in message
om...
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?
2. Has anyone done this? Do many people do this?
3. Any tips on negotiating mortgage for buying and construction?
4. What would you do if you have 4500 sq.ft of plot available behind
your main house?

-Kaushik




  #3   Report Post  
John A. Weeks III
 
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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-

--
================================================== ==================
John A. Weeks III 952-432-2708
Newave Communications
http://www.johnweeks.com
================================================== ==================
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Bill Seurer
 
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Kaushik wrote:
1. Do you think that this plan has hay loop holes, problems?


Let's see, oh yeah, the whole ILLEGAL part.

2. Has anyone done this? Do many people do this?


I'm sure people have done this. Some probably get away with it, some not.

3. Any tips on negotiating mortgage for buying and construction?


Make sure the lenders know all about the illegal part otherwise you can
get in trouble.

4. What would you do if you have 4500 sq.ft of plot available behind
your main house?


4500 square feet is pretty small. I'd put a garden in it.
--

-Bill
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Maren Purves
 
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Bill Seurer wrote:
Kaushik wrote:

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


Let's see, oh yeah, the whole ILLEGAL part.


+ neighbors. And is there a homeowners association?

4. What would you do if you have 4500 sq.ft of plot available behind
your main house?


4500 square feet is pretty small. I'd put a garden in it.


we have about twice that, probably more. Plant some fruit trees,
vegetables and some lawn.

I couldn't possibly stand the noise of having people that close by
in more directions than we have already. 4500sf is 67 ft square.
if you put a 1000 sf house on that you have 18 feet clearance
- assuming the house is square.

Maren


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Eric Tonks
 
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Won't your local town/city have an objection to allowing you to have two
houses on a single family lot?


"Kaushik" wrote in message
om...
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?
2. Has anyone done this? Do many people do this?
3. Any tips on negotiating mortgage for buying and construction?
4. What would you do if you have 4500 sq.ft of plot available behind
your main house?

-Kaushik



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Jamie
 
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"John W." wrote in message
om...
I'm just a lurker, but do you think it wise to admit in a public forum
that you know it's illegal? Wouldn't take an IRS agent ten minutes to
find this thread....


True. But that assumes that the IRS actually has the resources to enforce
petty income tax evasion by tracking down suspicious postings on the
internet with no other evidence of wrongdoing; that it's even possible to
identify the individual who posted that (is it a real email address? did it
exist before last week?); and finally it seems likely that the actual
offense would not be committed for years.



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Ravi Desai
 
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Besides, they are going to have a lot of explaining to do about why they
are surfing the internet while on the job

Jamie wrote:
True. But that assumes that the IRS actually has the resources to enforce
petty income tax evasion by tracking down suspicious postings on the
internet with no other evidence of wrongdoing; that it's even possible to
identify the individual who posted that (is it a real email address? did it
exist before last week?); and finally it seems likely that the actual
offense would not be committed for years.

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Maren Purves
 
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it may be part of their job assignment to find thing like this?

Ravi Desai wrote:
Besides, they are going to have a lot of explaining to do about why they
are surfing the internet while on the job

Jamie wrote:

True. But that assumes that the IRS actually has the resources to enforce
petty income tax evasion by tracking down suspicious postings on the
internet with no other evidence of wrongdoing; that it's even possible to
identify the individual who posted that (is it a real email address?
did it
exist before last week?); and finally it seems likely that the actual
offense would not be committed for years.



  #11   Report Post  
Jon Shemitz
 
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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?


Well, yeah. Not reporting income to the IRS is rarely a good idea.
Weigh the chances of getting caught against the depth of the GOP you
could land yourself in. Probably not a good trade-off.

Breaking zoning laws is also a bad idea. All it takes is one ****ed
off neighbor to land you in trouble ranging from fighting for a
retro-active variance (not easy, in most of (coastal) CA), to a huge
fine, to tearing it down AND paying a huge fine.

2. Has anyone done this? Do many people do this?


California's low-rent neighborhoods are full of this sort of illegal
housing.

4. What would you do if you have 4500 sq.ft of plot available behind
your main house?


I've got a deck, hot tub, greenhouse, vegetable garden, trampoline,
some lawn, and fruit trees. (And neighbors on three sides. Yuck.)

--

programmer, author http://www.midnightbeach.com
and father http://www.midnightbeach.com/hs
  #12   Report Post  
Jamie
 
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I seriously hope that MY taxes are not paying someone a salary for this...
considering how people get away with much larger, obvious income tax
evasions that don't require extensive Internet forensics to uncover the
identity of a person who is considering the possibility of committing a
crime at some point in the future.

I suspect the IRS would get a lot better mileage simply by auditing a larger
number of tax returns each year.

"Maren Purves" wrote in message
...
it may be part of their job assignment to find thing like this?

Ravi Desai wrote:
Besides, they are going to have a lot of explaining to do about why they
are surfing the internet while on the job

Jamie wrote:

True. But that assumes that the IRS actually has the resources to

enforce
petty income tax evasion by tracking down suspicious postings on the
internet with no other evidence of wrongdoing; that it's even possible

to
identify the individual who posted that (is it a real email address?
did it
exist before last week?); and finally it seems likely that the actual
offense would not be committed for years.




  #14   Report Post  
jason
 
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"Ravi Desai" ???
???...
Besides, they are going to have a lot of explaining to do about why they
are surfing the internet while on the job

Jamie wrote:
True. But that assumes that the IRS actually has the resources to

enforce
petty income tax evasion by tracking down suspicious postings on the
internet with no other evidence of wrongdoing; that it's even possible

to
identify the individual who posted that (is it a real email address? did

it
exist before last week?); and finally it seems likely that the actual
offense would not be committed for years.



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