From: Jon Shemitz 
Newsgroups: misc.consumers.house misc.invest.real-estate
Subject: Re: Illegally renting main house and living in another house built on 
 back of the house on same plot...
Date: Fri, 15 Oct 2004 22:08:29 -0700

Kaushik wrote:
 
> I am buying a property in CA. This has total 7500 sq.ft. plot. About
> 4500 sq.ft. plot is availabe behind main house. I want to construct
> another house on the plot, behind main house. Legally I will treat it
> as in-laws apartments (I will take legal permit for the construction).
> Once it is build I will move it the new house and rent the main house.
> Rent received is illegal and not disclosed IRS. So I am not paying any
> tax on rental income.
> 
> 1. Do you think that this plan has hay loop holes, problems?

Well, yeah. Not reporting income to the IRS is rarely a good idea.
Weigh the chances of getting caught against the depth of the GOP you
could land yourself in. Probably not a good trade-off.

Breaking zoning laws is also a bad idea. All it takes is one pissed
off neighbor to land you in trouble ranging from fighting for a
retro-active variance (not easy, in most of (coastal) CA), to a huge
fine, to tearing it down AND paying a huge fine.

> 2. Has anyone done this? Do many people do this?

California's low-rent neighborhoods are full of this sort of illegal
housing.

> 4. What would you do if you have 4500 sq.ft of plot available behind
> your main house?

I've got a deck, hot tub, greenhouse, vegetable garden, trampoline,
some lawn, and fruit trees. (And neighbors on three sides. Yuck.)

-- 

programmer, author  http://www.midnightbeach.com
and father          http://www.midnightbeach.com/hs