<p>My parents own a second home, which i have to include as an investment (i think). What about this second home (they rent it to others) is an investment: the full cost of the home, the mortgage they owe, or the amount of money they have already paid?</p>
<p>This may be a really lame question, but it stumped me.</p>
<p>please?</p>
<p>is a second home used for income an investment?</p>
<p>For your second home, I believe you need to report the equity in it…which is the value minus whatever mortgage your parents have. PLUS since it is a rental property, they will need to report the income from the rental as income.</p>
<p>I’m sure someone else here will either agree or disagree with me on this.</p>
<p>And yes… a second home used for income IS an investment.</p>
<p>Agree with Thumper on all counts. Report the equity plus the rental income.</p>
<p>Report the equity, but the rental income will already be included in the Adjusted Gross Income on the income tax form. Don’t count it twice!</p>
<p>Right…you just report the rental income where it’s supposed to be reported on your taxes. You do not report it twice. It’s included as part of your AGI. BUT be sure to include that rental income.</p>