own a 2 family house, FinAid consequences living there or not? Advice please.

[sylvan8798]

<p>

@notrichenough

Look at it this way:</p>

<p>You take a second job that pays you $2000/month in wages. You have to buy $500 worth of suits because the job requires it, and you drive 5,000 miles a year to get to this job.</p>

<p>or</p>

<p>You buy a rental property that pays you $2000/month in rent. You have to buy a $500 refrigerator to rent it, and you drive 5,000 miles per year to manage the property.</p>

<p>Both give you $24K/per year in income. You don’t get to deduct your clothes or your mileage from your income for a job. But you do get to deduct the fridge and the mileage for the rental.</p>

<p>That is because the tax code treats these situations differently. Why should the school? As far as they are concerned you have an extra $24K in income. Your expenses are not their problem.

So do they do that for other businesses as well? For example suppose you own a restaurant. Your gross sales are $2000/month. You have to spend $500 on food, and $100 to pay the dishwasher and the cook. As far as the school is concerned you have an extra $24K in income. Your expenses are not their problem.

You only get to deduct them because that’s the tax law that Congress voted in, not because there is some inherent “correctness” about the deduction.

Do you feel that we should be taxed on the gross rents then? And is that how you define “cashflow”? Irregardless of the expenses? At what rate would you tax them?</p>