Can I deduct a house with an elw from my taxes?
Hi, a house with an ELW is rented out 1/3 permanently and 1/3 for two years. 1/3 is permanently owner-occupied, and another third after two years. Everywhere says that you can only deduct the loan interest if you have separate loan agreements. According to WISO, however, you can also deduct it pro rata based on the rented living space with only one loan agreement for 3/3. Does anyone know if this is true and if a pro rata deduction of business expenses (pro rata loan interest, etc.) is possible without any problems?
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You want to rent out more house than you have.
Reduce the interest on the loan by the percentage of personal use. This is common practice and perfectly permissible. You do the same with depreciation, etc.
Why do I have more house than I do? Although I only have two residential units according to building regulations, I actually have three residential units with their own entrances, kitchens, bathrooms, etc.
That makes 1 1/3 house
I don't know
Where is it?
No problem. Do you know why it says everywhere that you should have a separate loan agreement for the rented living space?
Then I take everything back
You read that wrong. 1/3 rented permanently. 1/3 rented for two years, 1/3 owner-occupied.
ALL costs are divided in the ratio of own contribution to rent.
Yes, that's clear, but what if there is only one loan agreement for the entire house with 3 residential units?
The division ratio is easy to calculate. The house has a blueprint that shows the living/usable space calculation.
That's right, so there is no disadvantage if I only have one credit agreement
The internet also says that the Earth is flat. Not ALL of it is true.
That's all clear, my question was about why it says everywhere on the Internet that the rented part can ONLY
Can be deducted if you conclude a separate loan agreement for the rented portion when buying/building