Huh? Down payment on the rent credit program?
The rent credit program does not tie the renter to any one home. That is the whole point of it so one can claim there is no mortgage and therefore dodge the loan originating laws. No loan, ergo no down payment. The tenant accumulates rent credit “green stamps” which have no value until they have enough worthless rent credits that you simply give them title to their home in exchange for basically nothing. You have at that point disposed of business property in exchange for nothing, just like you threw out a leaky old garden hose, which if you were deprecating the hose you would write off the basis of the hose. So be it with the home you just gave away.
Here is an angle I’ve never seen discussed:
I would think that if the IRS ever got wind of the whole RC affair, they would go after the new home owners for taxes due for receiving a gift worth over – what is it? – $2,000. Surely that is how they would see it; the tenant paid nothing for the house, therefore it was a gift from good ol’ kind hearted Landlord, lovable doofus that he is.
Why not scrap the RC program and sell off the damn POHs just like any sensible, cigar smoking businessman would? For an empty home, you can demand a down payment (I find $2k works well) and a higher monthly payment which frees up your capital quicker.