One aspect that hasn't been covered yet is the importance of getting proper permits and meeting local building codes, which it sounds like you're already planning to do. This is crucial not just for safety, but also for tax purposes - the IRS wants to see that any business structure meets legitimate building standards. Since you're a general contractor handling the work yourself, make sure you document your material costs separately from what your labor would typically cost. Even though you mentioned not including your labor costs in the deduction (which is correct), having that documentation helps establish the fair market value of the improvement. Also consider having the structure professionally appraised once complete, especially if it's a significant investment. This creates a solid basis for your depreciation calculations and can be helpful if you ever face questions about the valuation. The fact that your wife's business is currently paying commercial rent actually works in your favor here - you'll have a clear comparable for establishing fair market rent if you go the rental route between you as homeowner and her LLC as tenant.

Great question about documentation! For material costs, definitely get formal receipts/invoices from your suppliers even with contractor pricing - the IRS cares more about legitimate business documentation than whether you got a discount. Keep everything organized by date and category (lumber, electrical, plumbing, etc.). As for banking, I'd strongly recommend opening a separate business account specifically for this project. It makes tracking infinitely easier and creates a clear paper trail that separates these expenses from personal purchases. Even if it's technically going through your personal finances initially, having that dedicated account shows intentional business record-keeping. One more tip since you're doing the work yourself - take progress photos throughout construction with timestamps. This visual documentation can be incredibly valuable for substantiating the scope and timeline of the work if you ever need to defend your depreciation schedule or prove the business nature of the improvement. The combination of proper permits, professional appraisal after completion, detailed material receipts, and photo documentation creates a really solid foundation for whatever tax approach you ultimately choose.

This thread has been incredibly educational! I'm actually dealing with a similar situation in my area where a religious organization owns several residential properties that seem to be operating as regular rentals. The systematic approach outlined here - starting with records requests for exemption documentation, then following up with diplomatic inquiries - gives me a clear roadmap. What I find most interesting is learning about the specific requirements like Form REL-1 and the notification obligations when property use changes. It seems like many of these situations might not be intentional fraud, but rather churches that legitimately qualified for exemptions initially but failed to update their status when circumstances changed. The distinction between "intended use" and "actual use" for tax exemption purposes is crucial. Even if a church bought properties with good intentions for religious use, if they're currently operating them as commercial rentals without proper notification to tax authorities, that's still a problem that needs to be addressed. I'm planning to submit records requests for the properties in my area and see what documentation exists. Has anyone had experience with churches voluntarily correcting their exemption status once issues are brought to their attention, or does this typically require formal assessment reviews?

This has been such a helpful discussion! I'm dealing with a similar situation where a religious organization in my area owns multiple properties that appear to be operating as standard rental units, and I wasn't sure how to approach it without seeming confrontational. The step-by-step approach outlined here is perfect - starting with public records requests to see the actual exemption documentation, then following up appropriately based on what's found. I particularly appreciate the point about framing inquiries as seeking information rather than making accusations. One thing I'm wondering about: if a church does turn out to be improperly claiming exemptions, what typically happens with back taxes? Do they just start paying going forward, or are they required to pay retroactively for the years they should have been paying? I imagine this could add up to quite a significant amount depending on how long the improper exemption has been in place. Also, for anyone who's been through this process, how long does a typical assessment review take once the county starts investigating? I want to set appropriate expectations for how long this might take to resolve.

These are all amazing suggestions! Thank you so much everyone - I've got way more material than I expected. The mix of crypto cases, tribal law, conservation easements, and corporate tax shelters gives me tons of options. I'm leaning toward either the Mescalero Apache case for the tribal sovereignty angle or maybe pairing the Amazon and Facebook cases to show the evolution of digital asset taxation. The micro-captive insurance cases also sound really compelling - especially if I can find one with particularly egregious facts that will get a reaction from the class. Quick follow-up question: for those who've done similar presentations, did you focus more on the legal reasoning and precedent-setting aspects, or did you spend time on the practical implications for tax practitioners? I'm trying to figure out the right balance for a 20-minute presentation.

Another fascinating case that might work well for your presentation is Estate of Michael Jackson v. Commissioner (2021). The IRS valued Jackson's name and likeness at $434 million for estate tax purposes, but the estate argued it was worth only $2,105. The Tax Court ended up valuing it at $4.15 million - a huge win for the estate. What makes this case so compelling is how the court analyzed the valuation of celebrity image rights and intellectual property after death. They considered factors like negative publicity from the abuse allegations and how that affected the commercial value of his brand. It's a perfect intersection of pop culture and complex tax law that definitely keeps students awake! The case also has great precedential value for estate planning with intellectual property assets, which is increasingly relevant as more wealth is tied up in intangible assets and personal brands.

Our accountant told us to keep careful records of the original payments going out for the loans and the reimbursements coming in, regardless of what method you use. Save statements showing the loan payments and the corresponding Apple Pay or bank transfers. Having that documentation is super important if the IRS ever has questions. Also dont forget to look into student loan interest deductions on your taxes! If your mom is legally responsible for the loans but you're making payments, there are specific rules about who can claim the interest deduction.

Just wanted to add another perspective on documentation - I've been in a similar situation with family loan arrangements for the past few years. One thing that really helped me was setting up a simple spreadsheet to track everything monthly: the loan payment amount, date paid, my brother's reimbursement amount, date received, and payment method used. This creates a clear pattern showing these are reimbursements rather than random income, especially if the amounts consistently match up. I also take screenshots of the loan payment confirmations and the corresponding Apple Pay receipts. It takes maybe 5 minutes a month but gives me peace of mind that I have everything documented if needed. The IRS guidance is clear that reimbursements aren't taxable income, but having organized records makes everything much smoother if questions ever come up. Plus, it helps during tax season when you're trying to remember what all those payment app transactions were for!

Quick question - does anyone know if a resale certificate works across different states? Like if my business is registered in Texas, can I use my Texas resale certificate when buying inventory from a supplier in California?

One thing I'd add that helped me tremendously when starting my business - consider getting registered with the Streamlined Sales Tax (SST) program if your state participates. About 24 states are members, and they've simplified a lot of the multi-state resale certificate issues. Through SST, you can often use a single uniform certificate across participating states, which eliminates the headache of tracking different forms for different suppliers. It's been a game-changer for my online business since I source inventory from suppliers in multiple states. Also, just to emphasize what others have said about record-keeping - I use a simple spreadsheet to track every purchase made with my resale certificate. I include the vendor name, purchase date, items bought, certificate number used, and then later add the sale date and customer info when I resell those items. Takes 30 seconds per transaction but has saved me hours during tax season and gives me peace of mind in case of an audit.