I bought a second home which I rent to my disabled brother. For taxes is it a rental or a second home?

I would not take advice on this matter from anyone but a tax accountant. And, I would want to get the answer face-to-face. The penalty for taking the wrong approach is too high, and the benefit for taking the correct approach in tax savings is high.

As others have mentioned you should go to a tax adviser for a true answer. I will answer on my experience as a landlord.

First, I believe you answered your own question. You rent the place to him. You clearly state it in your first line. It seems that you rent this place to him and he pays the mortgage. I am assuming that you aren't getting anything more than the mortgage payment?

For tax purposes you would claim all income from the property (the mortgage payment). You would then get to list all the tax paid on the mortgage for your deductions. There is much more that you can do, such as depreciating the property, but a tax adviser will be able to tell you if this would work out well in your situation.

Good Luck!

You need an accountant who does tax preparation . You need to show that its a genuine rental situation . There may be a lot of allowable deductions , basically all the costs of maintaining and renting the property, but NOT capital improvements.

since you have control over the property--and you want the most

tax advantages, I would ask

my CPA if I were you--"under which circumstances would i obtain the

best tax benefits" if I owned two

houses--and rented one out.

IT seems as if you want it to be

one or the other; why can't it

be both?

FYI--keep in mind that revenue

generators usually get you the

best tax write-offs too.

[which is why our gov loves to have

people start businesses.]