Use of Personal Assets (Building) in Business

Hi all,

Quick question, if I purchase property in my own name, and then rent it out at a later date, can I include in in my business accounts?

The rental income and the asset?

That is a question for a local accountant and/or tax authorities. Probably not, though, unless you are a sole proprietor/trader. If it is legal, though, Manager can handle it.

It all depends. At least in the region I’m living, it all depends on the kind of business. For example, if your business is a corporation, you can’t register the building as an asset in the corporation because the asset is not property of the corporation. You can deduct the rent expense in the business, but you have to recognize that expense as an income in a personal level for taxes.

On the other hand, if your business is a DBA (doing business as), then all of it is in your name. You can’t deduct rent income because you can’t pay rent to yourself but you can use a portion (let’s say, 1/4 of the property) for depreciation purpose.

Another example could be that you are a DBA and you purchase a building for your business. In that case, given that through the DBA everything is in your name, then you can recognize that building entirely on your accounting because the fact is that your building is for the business and not for personal use.

However, I don’t know if this is applicable for every country. In accounting terms I know this three examples are possible, but you can’t forget about the tax laws in your country that may be different. I hope this could help.