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Author: NoazDad Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121565  
Subject: Second home cannot be a duplex? Date: 1/4/2008 1:59 PM
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Here's my situation. I lived in Buffalo in a 2-unit duplex for 10 years. I file a schedule E every year, claiming 50% of the overall house expenses.

In 8/06, I relocated to Alexandria VA. where I'm renting an apartment - but I kept the house in Buffalo. The rent I'm getting for the upper is essentially paying my mortgage, so why dump it? I have family in the area, and I come back every other weekend or so to visit, so most of my stuff is still in the house. I just spend 80% of my time in the DC area, and I claim that as my primary residence.

Now I'm trying to do a refi on the Buffalo house, and they're telling me that I can't claim a duplex as a "second home", and I have to declare it an "investment property" even though I still occupy the lower.

Is that true? What are the ramifications to my Schedule E? I have to claim Alexandria as my "tax home", or I have to pay NY State taxes, right?

Confused...
-Paul in VA-
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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 97624 of 121565
Subject: Re: Second home cannot be a duplex? Date: 1/4/2008 2:08 PM
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Now I'm trying to do a refi on the Buffalo house, and they're telling me that I can't claim a duplex as a "second home", and I have to declare it an "investment property" even though I still occupy the lower.
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That is not a tax issue. That is a financing, and perhaps insurance issue - aggravated, perhaps, by recent developments. They have different requirements for principal residences, and other property.
I don't know why it wouldn't be a 2nd home, either, except that as it's partly rented, they have to treat it as a rental property for theie own reasons.

It does not affect your schedule E, or your state tax situation at all.

Bill

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