I have a family trust with 2 properties in it. These have been rented out and I have been filing tax returns.
I also have a sole trader home business. Up until now we have been renting other homes and I have been claiming the home office deduction in accordance with the rules.
Next year we are moving into one of the trust homes though. I am not entirely sure how to account for the home office part and which is best. Does:
1. The trust allow us to live their rent free as trust beneficiaries (I could not claim the home office and I would need to top up the trust by way of making gifts each year, so it had enough cash to pay the mortgage, rates etc). The trust would go to making a definite loss each year (expenses of two properties, but only the income of one rental property + my gifting which is not income?) OR
2. The trust rent/lease the house to us. I could then claim the home office expenses in the normal way too. My only question under this scenario is how to set the rent. What are the rules around that?
Thanks
I also have a sole trader home business. Up until now we have been renting other homes and I have been claiming the home office deduction in accordance with the rules.
Next year we are moving into one of the trust homes though. I am not entirely sure how to account for the home office part and which is best. Does:
1. The trust allow us to live their rent free as trust beneficiaries (I could not claim the home office and I would need to top up the trust by way of making gifts each year, so it had enough cash to pay the mortgage, rates etc). The trust would go to making a definite loss each year (expenses of two properties, but only the income of one rental property + my gifting which is not income?) OR
2. The trust rent/lease the house to us. I could then claim the home office expenses in the normal way too. My only question under this scenario is how to set the rent. What are the rules around that?
Thanks
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