Buying House for Home Business

[JBIG]

California

Currently I work for my Dad's company, in the insurance industry. We run our office out of a residential house my dad owns seperately from his primary residence. My Dad is going to retire, and I want to merge my home and the office into one location. I currently own a condo, I would like to buy a fixer or a foreclosure home, improve it so I can run the office efficiently, and then move the office out of the current location and into my home.

I know little to nothing about what this would require legally and what not.

Can I charge the same rent as they are currently being charged?
this is the main issue for me because my monthly mortagage payment amount will be basically split 50/50 between my own paycheck and the rent I recieve from the office.

I am told that there is a difference in Tax deduction as well... but I know little about how or why etc.

can anyone help me? or point me to somewhere I can look into these things more myself?

 

[FlyingRon]

Start here:

http://www.irs.gov/publications/p587/index.html

If you charge the business rent, you will need to include that as personal income. You have the normal deductions for depreciation and other expenses as are customary for the rental portion against that income.

Of course, the business books that as an expense on their taxes.

You might want to look into the zoning and other local issues for running a business out of a residential building. You may already be violating those in your current use.