This is why we chose not to depreciate anything despite the fact that I pay personal property tax on what the City considers to be part of the business. I sent them a blank form because we depreciated nothing. Fine, they still assessed us a nice chunk of change on what I'm not sure because they of course don't send you anything back. We are deducting hard expenses for the guests and our second house and the mortgage, etc. on that house because it is strictly a "rental". We are not even deducting our own mortgage. Still, we will have enough to deduct to have made very little money our second year in business. This was a big factor in our decision to close the business.
It is sad, very sad that small B&Bs like us have almost all the same overhead as larger ones and can really make no money. Many people have the privilege of being a steward of a large historic home and they live in a tiny part of it. Reality sucks..
My plan is.......if it ever happens....is to work/develope this B&B for another 10 years (will be 76 then) turn over the B&B to one of my 4 or more daughters while I shuffle around the kitchen cooking b'fast for guest. Now how do I divide it all when I pass on ? One daughter wants the home to be a vacation house for them all when I pass on. Who mowes the 3/4 acre lot,etc,etc. One daughter does live in Bridgewater now,they are sort of interested and son in law is a great help repairing things now. Hopefully this will not be taxed for a long time if it stays in the family.......if it ever happens.....Suggestion/ideas ? welcomed..Mary in Bridgewater
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Speaking as one that took care of my dad by myself with constant orders from my sister half the country away, with the end of my brother and I having to go to a lawyer and a judge to be able to sell the house, I would recommend that you draw up something legal to protect the local child from having to do all the work, and protect the distant child from losing out if she wants to keep the property.
Give each child the ability to buy the others out if they don't want to keep it. Make it workable for the one not keeping and workable for the one that wants to keep it. They may change their minds about the whole issue 10 or 20 years down the road.
My sister wanted to set up a situation to buy my brother and me out that would have had us getting our money when we turned 150 years old.
RIki
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