How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask WebCPA Your Own Question
WebCPA, Tax Accountant
Category: Tax
Satisfied Customers: 111
Experience:  Licensed CPA. 10+ years experience.
Type Your Tax Question Here...
WebCPA is online now
A new question is answered every 9 seconds

Im planning to buy a house for my brother to live in while

This answer was rated:

I'm planning to buy a house for my brother to live in while attending school. Will that qualify as my second home, or investment property? My intent is to help my brother out instead of me giving the money to rent an apartment. Also, if this ends up as second home and if down the road he ends up having his best friend as a roommate, will I be violating a second home rule?
If you do not ever live there it is not a second home and is more appropriately treated as an investment for tax purposes. There is no rule that prevents a person from making an investment that happens to benefit a brother.

Assuming that he pays a reasonable rent for the property, there would not be any issue of taxation for an "imputed gift".

If he pays no rent, then the value of the rent would be considered an imputed gift and you would have to issue him an IRS Form 1099 for the fair market value of the rent he did not pay, and he would have to pay tax on the 1099 "income".

Your brother having a roommate would obviously help him cover the rent, and would further disprove any claim that this is your second home.

There is a sample of a Colorado lease agreement posted here that you can modify to allow a house mate. You can also find lease forms in stationery stores or at

You can get a free consultation from some of the landlord tenant lawyers listed by location at

Some towns in Colorado require all rental agreements for a term of over 30 days to be memorialized in a written lease, see

I hope this information is helpful.
Customer: replied 3 years ago.

I don't plan on charging rental from him or his roommate. All I want is for the utility bills he/they used to be paid by them. We do vacation to Colorado at least twice a year for about two to three weeks (non consecutive) so I do plan on using the home for vacation also. Does that still qualify as investment property?

I am going to move your question over to the Tax Experts.

Welcome and thank you for your question. I'll do my best to provide an informative answer. Please let me know if you need any clarification.

This would qualify as a second home. The property taxes would be deductible on Schedule A as an itemized deduction. The mortgage interest would also be deductible on Schedule A, subject to limits (see Pub 936 here ).

If down the road you decide to rent the home, you would then be allowed to deduct depreciation, along with taxes, interest, etc. on Schedule E. Until then, it would just be a second home.

When the home is sold, the gain or loss would be subject to capital gains tax rates.

I hope this helps and if you need further assistance please let me know.

WebCPA, Tax Accountant
Category: Tax
Satisfied Customers: 111
Experience: Licensed CPA. 10+ years experience.
WebCPA and 6 other Tax Specialists are ready to help you

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Previous | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA

Meet The Experts:

  • Wallstreet Esq.

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    10 years experience
< Last | Next >
  • Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    10 years experience
  • Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • Richard's Avatar


    Tax Attorney

    Satisfied Customers:

    29 years of experience as a tax, real estate, and business attorney.
  • Robin D.'s Avatar

    Robin D.

    Senior Tax Advisor 4

    Satisfied Customers:

    15years with H & R Block. Divisional leader, Instructor
  • Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
  • jgordosea's Avatar


    Enrolled Agent

    Satisfied Customers:

    I've prepared all types of taxes since 1987.
  • R. Klein, EA's Avatar

    R. Klein, EA

    Enrolled Agent

    Satisfied Customers:

    Over 20 Years experience