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It is my understanding that buying with a long term lease option, such as 5 years, that I control the property appreciation (with the option) and the profits and use (with the lease). As such, for tax purposes, I own the property and therefore can take depreciation and other tax benefits. Am I incorrect in this assumption? I wouldn’t give the party I am buying from any tax advice since I am not a CPA, so I can’t control whether or not they take depreciation for leasing the property to me.
Greg,
I do NOT think that is correct. If you have a 30 year lease option, then you can claim depreciation and other tax benefits just like you own the house – but not with a 5 year lease.
You’d have to buy subject to the mortgage to qualify for all tax benefits.
But, I’ll check with a CPA friend to find out for sure.
Jackie
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