Combined Family Daycare and Taxes

[cuphalfful04]

I'm wondering if anyone has done this before. My sister and I are both daycare providers and we wanted to combine our businesses. We saw an awesome 2 family home with a shared 4 car garage for purchase. We were thinking of doing a combo preschool/daycare from the garage. Tax wise, who would be entitled to the tax deductions? Would it be better for one to claim the daycare expenses and the other the preschool one? Or should one of us just be an employee or a self contractor ? Thanks for any input. This would be our ideal dream job if we could even see if it's possible

[TomCopeland]

two businesses?

I'm wondering if anyone has done this before. My sister and I are both daycare providers and we wanted to combine our businesses. We saw an awesome 2 family home with a shared 4 car garage for purchase. We were thinking of doing a combo preschool/daycare from the garage. Tax wise, who would be entitled to the tax deductions? Would it be better for one to claim the daycare expenses and the other the preschool one? Or should one of us just be an employee or a self contractor ? Thanks for any input. This would be our ideal dream job if we could even see if it's possible

The short answer to this is: one person should hire the other as her employee. It's complicated. The person who owned the property can claim the house expenses. If the other person paid rent to the owner, the owner would have to report it as income and could claim some house expenses on Schedule E. It would be extremely difficult to try to run two child care businesses out of one home. Because this is complicated, feel free to call me at 651-280-5991 for more information.

[cuphalfful04]

Thank you so much Tom. It does seems extremely complicated so I think we're going to hold off until we figure out more details. When the time comes, I will definitely get in contact with you. Thank you