patrick.net

https://www.hcd.ca.gov/policy-research/accessorydwellingunits.shtml?source=patrick.net#adu

Questions I have...

1) would you have to pay taxes to 2 different states?
2) it would be in the ADU owner/subletter's best interest to make some kind of spreadsheet that would convince potential clients
it is worth doing, don't you think? If everything checks out, yes, I think this could be a great money maker.
3) Yes or No? Would tracking your IP address (every remote worker is going to be working on a computer) give your working location
away to your boss/IT department? If so, would this kill the idea?

WineHorror1 says

Would tracking your IP address (every remote worker is going to be working on a computer) give your working location
away to your boss/IT department? If so, would this kill the idea?

The ADU has a little server room that hosts VPN software. ADU renters would get access to the VPN so it looks like you have a local IP address.

Might as well do it in East Palo Alto. Nobody would notice the continuous rotation of occupants or if you stuff 5 or 10 people in the ADU.

ad says

https://www.hcd.ca.gov/policy-research/accessorydwellingunits.shtml?source=patrick.net#adu

This can probably work with a duplex unit. Maybe even a condo.

WineHorror1 says

3) Yes or No? Would tracking your IP address (every remote worker is going to be working on a computer) give your working location

Who is going to track it? And it can be spoofed with a VPN. My VPN shows me being in Toronto, Ontario, for example.

WineHorror1 says

1) would you have to pay taxes to 2 different states?

How many ppl rent in the state they 'live' an work vs where their out-of-state himself is? Do they pay income taxes in both states?

Even when the laws are on the books to pursue ppl.who do, they are not enforced any more than the Use Tax is. Unless they want to politically punish you like NY city and state did to Rush Limbaugh after he moved to Florida. But even in that case he wasn't working remotely and there was a paper trail proving he was working in NYC.

SunnyvaleCA says

Nobody would notice the continuous rotation of occupants or if you stuff 5 or 10 people in the ADU.

I expressly said ther would be not be that many ppl at any time. As fir continues rotation, the apt next door to mine has that going on already. Dunno if they are AirBnBing or the property Mgr is doing it. Nothing is illegal about it.

SunnyvaleCA says

The ADU has a little server room that hosts VPN software. ADU renters would get access to the VPN so it looks like you have a local IP address

How and why would remote ADU subletters use it?

Aren't there laws regulating how many people can legally live in a unit of a certain size?

Sure, slumlords violate them all the time, but if we are talking "strictly above the board" model this would be one of the obstacles.

Why do you need an ADU?
The ADU most likely wont have its own address number, like 921-B or 922 if the main house was 921.
Why not just set everything up in a SFH inside the main house?

And to answer your question about the IRS laws being broken, just wait until they audit and find out you don't actually have an Office that you're adding to your itemized deductions.

RWSGFY says

Aren't there laws regulating how many people can legally live in a unit of a certain size?

Sure, slumlords violate them all the time, but if we are talking "strictly above the board" model this would be one of the obstacles.

How so? Not enforced proactively. Only if neighbors complain/report. Which they won't because at most would be one person/couple showing up at a time, much like if it were AirBnB'd.

Even the authorities in SF don't care when units are converted to de facto dorms.

And in this case, all that exists on paper at the landlord end is the lease between him and the out of state LLC/Corp that is subletting out.

HunterTits says

READ. I already explained all this. Twice now, I think.

You have not explained Jack SHIT! You put together a loosely hobble thought about using your shed out back and putting in a bunch of computers and a fast internet connection, and then renting those remote workstations out as physical locations, for dishonest scofflaws to use around the country to evade local, state and Federal income taxes. What you're proposing isn't like a PO box.
Now that people are asking questions trying to understand what you're trying to do, you snap back "Read the damn thing!".

All we're trying to do is understand what we already read, do you want input or not? If anyone misunderstood what they read, then answer their question and enlighten them. Just barking out "Read the damn thing!" isn't a productive answer.

I would be bet that people are asking questions or making comments because it sounds like a workable idea. If the idea were to hold up, I'd be very interested in investing/partnering.

Tenpoundbass says

You have not explained Jack SHIT

Just because you didn't bother to ficking read does n8t prove that I haven't Saud jack shit.

Example:

Tenpoundbass says

You put together a loosely hobble thought about using your shed out back and putting in a bunch of computers and a fast internet connection, and then renting those remote workstations out as physical locations

I.never said any of that bullshit you just wrote. None.

You just dreamed all that up on your own. Because you didn't bother to fucking read.

Here's another one you pulled out if your ass:

Tenpoundbass says

dishonest scofflaws to use around the country to evade local, state and Federal income taxes.

I never said ppl shouldn't pay their taxes. Quite the opposite.

Tenpoundbass says

All we're trying to do is understand what we already read, do you want input or not? If

Not from you and all the other total jackasses here who should go get jobs at CNN misrepresenting shit since that is clearly what you are doing now...simply because you are too intellectually lazy to FUCKING READ.

Just stay out of it. You're wasting ppl's time AND looking like a jackassed idiot at the same time. <--- fact, not opinion. You really fucked up TPB. It is embarrassing to see.

WineHorror1 says

I would be bet that people are asking questions or making comments because it sounds like a workable idea. If the idea were to hold up, I'd be very interested in investing/partnering.

@WineHorror1 Gets The Patnet Award For Having Reading Comprehension Skills That Don't Suck

Whereas @Tenpoundbass Gets The Patnet Award For Getting Thru Life With Shitty Reading Comprehension Skills.

So, moving forward. Finding a landlord who would set this up. One with decent reading comprehension skills is a must, as we have all learned here.

I haven't paid attention to where every Patnetter lives. Who is on the ground in SF, Palo Alto etc? Maybe there is even a Patnetter who has something to rent? But then, I guess they could simply run with the idea themselves.

1 more question: would the subletter face any liability for, well...are there any unknowns?

Tenpoundbass says

Why do you need an ADU?

You don't. Could be a duplex unit. Could even be a condo.

Tenpoundbass says

Why not just set everything up in a SFH inside the main house?

Better to have a distinct unit, I would think.

Tenpoundbass says

The ADU most likely wont have its own address number,

https://findanyanswer.com/can-an-adu-have-a-separate-address?source=patrick.net

Tenpoundbass says

And to answer your question about the IRS laws being broken, just wait until they audit and find out you don't actually have an Office that you're adding to your itemized deductions.

Your house elsewhere. The one you own. If you have a room that you use as an office.

And this isn't about IRS deductions. This is about doing what you have to to get the Bay Area $$$$ from your employer while living in an area outside it.

The math difference can be immense. $200k vs $120k or even less. So if there are complications with the home office deduction from this...guess what, fucking forgoing said deduction is probably more than worth it

HunterTits says

<--- fact, not opinion. You really fucked up TPB. It is embarrassing to see.

I see your problem, you write a hairbrained idea using abbreviations not everyone in the country understands, you say you would put remote access in the ADU(from what I found that's a shed or a detached dwelling, am I correct?).
You really didn't explain who your customer would be, or provide any use case when people try to connect the dots on their own. You then accuse them not reading it. Then rather than providing clarity, you go on to quote all of the bits that made you upset and made quips about them, rather than providing feedback.

Admit it, you're not looking for advice, opinions, or collaboration on your idea. You just want to bitch the responses to your threads. You've got a little bit of a Contention problem!
You're not sure why you're arguing or to what end, are you?


OK great one! Enlighten me, why in the fuck would I load my fucking shed out back up with hundreds of remote access, if not to run a virtual PO box remote office sort of deal for evading tax laws and defrauding City and States.

I'm not necessarily knocking it from your side, but it sure sounds like your Customer use case would be a scofflaw. And when they go down, they'll bring the whole load of poo water to your front door.

HunterTits says

WineHorror1 says

3) Yes or No? Would tracking your IP address (every remote worker is going to be working on a computer) give your working location

Who is going to track it? And it can be spoofed with a VPN. My VPN shows me being in Toronto, Ontario, for example.

Here's the thing here, you'll need two VPNs. The first is the one which boots up with your desktop and the 2nd, for the work itself (usually given by your firm's IT dept) on the same hardware. Sometimes, these things can conflict in terms of security settings between the differing software tools.

A better way is to get a Virtual Hosting Server where in effect, your workstation is on a server farm somewhere in California and then, using your home PC, you log onto your virtualized workstation & then, you separate your work & home computing environments completely. By doing all, all your IT updates and packages get delivered to a remote desktop far away from home and then, your IT dept knows nothing about you.

I believe the objective of the post is to earn higher California pay and pay lower rent in a cheaper housing preferably in a state with no income tax.

At first I was confused because I didn’t know if the higher pay in California is worth the state income taxes one owes on income derived from California.

The difference to decide may depend on the other sources of income one might have besides his labor, e.g. dividends, capital gains and interest.

For example, one could be a Florida resident and have $50,000 income from dividends and etc. and owe no California tax on this money.

But I’m not sure how it would work because the employer will use the California address for the W2 and 1099.

I met several people in Baja California Sur Mexico who worked remotely to take advantage of much lower housing prices; they were from Vancouver, Portland, Europe.

Of course they had other reasons also.

I’m dealing with the problem a bit myself because I need to renew my drivers license in a couple of years even if I don’t spend much time in Florida.

Tenpoundbass says

you say you would put remote access in the ADU(from what I found that's a shed or a detached dwelling, am I correct?).

No you are not correct. I fucking never said any such thing.

Simeone else brought it up and I asked why even bother?

Tenpoundbass says

You really didn't explain who your customer would be,

Oh yes I fucking did. Clear as hell I did.



Tenpoundbass says

You then accuse them not reading it

Accusation based upon observed evidence you yourself provided and continue to do so.

Tenpoundbass says

you're not looking for advice, opinions, or collaboration on your idea.

No.. What I refuse to put up with are ppl who fucking waste my time because they are too lazy to FUCKING READ.



Tenpoundbass says

OK great one! Enlighten me, why in the fuck would I load my fucking shed out back up with hundreds of remote access,

Here's your enlightenment:

I NEVER FUCKING SAID THAT.

How many times do I have to say that? And then you wonder why I say YOU DON'T FUCKING READ?

I think the ADU scheme would work.
But would subletting your own house also accomplish the same thing? And how many times can you sublet your house? Is there a limit?
Because the real purpose of this arrangement is secure a legitimate physical mailing address where mail and documents can be delivered and residence established. An enterprising home owner could “sublet” in this way to as many remote workers as necessary. Maybe just not from the same company.

Rin says

Here's the thing here, you'll need two VPNs. The first is the one which boots up with your desktop and the 2nd, for the work itself (usually given by your firm's IT dept) on the same hardware. Sometimes, these things can conflict in terms of security settings between the differing software tools.

A better way is to get a Virtual Hosting Server where in effect, your workstation is on a server farm somewhere in California and then, using your home PC, you log onto your virtualized workstation & then, you separate your work & home computing environments completely. By doing all, all your IT updates and packages get delivered to a remote desktop far away from home and then, your IT dept knows nothing about you.

Ok. Perhaps I am missing something here, but why would I need that?

I go to a park. Use my cellphone Hotspot to work remotely. Does that mean my legal residence is now in that park?

I go to Starbucks, use their wifi....

...and so on.

clambo says

I believe the objective of the post is to earn higher California pay and pay lower rent in a cheaper housing preferably in a state with no income tax.

Yes. That is the gist of it.

$200k but paying CA income taxes but not CA housing costs vs being paid $120k or less if I do things the conventional way like formally moving my residence to Podonkia and tell my employer so.

My $300 or so month rental of the ADU or Duplex or whatever gives me a lease and paper trail which I can take to the DMV, get my W-2s delivered to and (if necessary) give a copy to my employer to confirm that I live in the Bay Area to justify my Bay Area salary.

Meanwhile, I work from my HOUSE THAT I CAN FINALLY AFFORD TO FUCKING BUY that has a payment no more than $1k/mo. In Podonkia.

Legally and as far as the IRS and CA is concerned, that house is my secondary residence.

The state that the house is in has the onus of proving otherwise, which will be a tough nut to crack esp given the costs in doing so will be greater than what they would get back from me.

Ppl work from the out of state secondary homes all the time, ppl. So Podonkia will collect my property taxes on it and just call it a day.

Shaman says

I think the ADU scheme would work.
But would subletting your own house also accomplish the same thing? And how many times can you sublet your house? Is there a limit?
Because the real purpose of this arrangement is secure a legitimate physical mailing address where mail and documents can be delivered and residence established. An enterprising home owner could “sublet” in this way to as many remote workers as nece

You've got the gist of it. More than I can say of others in this thread.

This is why I propose an intermediary legal entity interposed between the homeowner and all those remote renters. Homeowner only has one tenant on the books. One lease. The entity has the multiple leases. Preferably an entity charted out of state somewhere.

HunterTits says

The math difference can be immense. $200k vs $120k or even less. So if there are complications with the home office deduction from this...guess what, fucking forgoing said deduction is probably more than worth it

This is the kind of math I want to know more about. At what numbers does it make sense for someone to want to do this? Once we know the numbers, we can then target the client base and market. It would be a good idea to partner with, or have on retainer(?), an excellent tax attorney/preparer.

Shaman says

Maybe just not from the same company.

Good catch. Yes, this would be very important.

How big is the market? I suspect it is more than just California this would work in. Probably many many large cities. Come on guys, let's get something going.

WineHorror1 says

This is the kind of math I want to know more about. At what numbers does it make sense for someone to want to do this? Once we know the numbers, we can then target the client base and market. It would be a good idea to partner with, or have on retainer(?), an excellent tax attorney/preparer.




53
 



WineHorror1

Yep. I am going off of my situation, my boss' and two coworkers who make less than me.

Those discussions with them is what spawned this idea.

HunterTits says

Ppl work from the out of state secondary homes all the time, ppl. So Podonkia will collect my property taxes on it and just call it a day.

Homeowners tax exemption is something to factor in. Not a huge break anyway, but you'd have to pay higher property taxes in Podonkia if I'm following correctly. So primary is in high pay CA, but you don't actually live there and can utilize the space when required for the occasional quarterly meeting to stay at or whatever and earn more money because of COL. Spouse can work in income tax free Podonkia AND your house is substantially cheaper than CA. So the $300/mo on the ADU is not a big deal.

Not a dig, but I'm reading what you're saying, but it's not 100% clear to be honest.

If I'm understanding correctly this is what I think you're talking about:

Work in silly valley, but are allowed to work remotely, but pay is based on where you live.
If they know you live in Milton, FL where you can get a $200-250k house, they pay you less working remotely?
You get the job and say you live at 123 Maple Ave in San Francisco at the ADU.
You get your 6 figure job in CA and have a cheap house/COL somewhere else.
If married spouse can work in FL and have no income tax, while you still technically live in CA and pay their taxes.

If I'm following it's somewhat similar to trucking companies getting Maine license plates for their trailers. They don't live or reside there, pay the registration fees to Maine and any other applicable taxes, but it's substantially cheaper than say getting registration in IL or CA if you're the trucking company.

Basically I fly out to CA, get a job with Apple. I rent the ADU and list that as my W-4 address, but I'm really living in FL and Apple allows me to work remote. I pay CA income taxes on my income, my spouse pays no FL income taxes if they work in FL. You then get a cheaper house than you could get in CA but Apple thinks you live in CA for the $300/mo.

On the business side you're renting out a single ADU to multiple people in CA and raking in some income as no one generally will use it and you likely won't get caught as long as you document the rents and pay appropriate fees/taxes. It makes sense if I'm following correctly. You generally have to just provide gross income on rentals, you don't have to report the leases or number of "tenants" so to speak.

Audit issue I see is if the gross ADU rental is insane. If there's a red flag on your taxes, an ADU getting $15k/mo is just that, a red flag. IRS can/will do a quick GIS map search of the property and know that income is way more than should be coming in. The renters paying $300/mo would have to not write of the cost as you kind of mention. IRS will flag that shit in a second if 50 people write off a lease at the same address and it's discovered it's an ADU.

It make sense for as long as it's allow and you're prepared for legal fees. Just because something is legal, doesn't mean a local muni or state will not try and take you to court over it. It does sound like a good idea or a win/win for homeowners with an ADU and the remote work employee. Hell even the employer as they'll have a happier employee likely having an employee living in a lower COLA, but they would necessarily know it's basically a BS address.

TL:DR - It's a good idea for property owners with an ADU. I'd be careful with "over renting" so to speak would be the only suggestion. Or buy the house in an LLC as you say, rent the main space and then an ADU. This is actually a great idea if I'm getting the idea correctly.

I don't think I would want the 'proxy liability' if these timeshare renters don't pay their taxes, commit crimes, use the place as a cover for illegal activities etc. especially if you are giving them an address (yours) to exploit as flybys? It sounds like you are renting out your address more than renting out a space to a variety of John Does, with the space itself as a pretense for temporary rental. What process would you have to implement to vet these guys? It would cost more than $300 a month to require them to carry their own insurance, which would be defined as what exactly?

Sometimes if officialdom comes sniffing around to skip trace a timeshare guy using the address, they might just think the owner is the next best thing to arrest or extort. Insurance would be a nightmare. The 'clients' are all scattered to the wind, but you are standing there with the official bullseye on your back for every obscure regulation and requirement that a predatory bureaucrat could drum up. I can't see keeping something like this 'under the radar'.

When I had business at a specific leased address, the first thing I noticed was that I was a sitting duck target of every regulator, tax shill and fee bandit who was aware of my address, which I had to promote to promote the business. I remember getting all of those dunning and tax letters for employees who only were there a short time. Having a bunch of people funneling through an address with you holding the bag for the address itself does not sound like something that would last long without negative consequences.

There are generally rules against renting to groups where the number of people is greater than (the number of bedrooms + 1).

Could be a problem.

Patrick says

There are generally rules against renting to groups where the number of people is greater than (the number of bedrooms + 1).

Could be a problem.

Where is that happening when the landlord is only renting out to a single tenant, the LLC or whatever? :)

Ceffer says

It sounds like you are renting out your address more than renting out a space to a variety of John Does, with the space itself as a pretense for temporary rental.

Yes and no.

Landlord is strictly renting it out to ABC LLC or whatever.

ABC is then subletting it out as you say.



Ceffer says

. I can't see keeping something like this 'under the radar'.

Waaay easier than you think.

"ADU owner 'rents out' his unit to an LLC/Corp entity." Whose name is on the ownership for the main property, which I assume also holds equity in the property (or not)?

How legally impenetrable is this corporate 'shell', or will there be different layers of corporate shell to create a legal fortress from assault that would exhaust seekers of liabllity, tax liens, contractor liens etc.?

I think this is something you would exploit for a calculated time before the temperature started going up, and then abandon, or shift to another address to rinse/repeat trying to stay ahead of any generated wolf packs, kind of like a boiler room operation.

WookieMan says

Homeowners tax exemption is something to factor in. Not a huge break anyway, but you'd have to pay higher property taxes in Podonkia if I'm following correctly. So primary is in high pay CA, but you don't actually live there and can utilize the space when required for the occasional quarterly meeting to stay at or whatever and earn more money because of COL. Spouse can work in income tax free Podonkia AND your house is substantially cheaper than CA. So the $300/mo on the ADU is not a big deal.

Wow.

You restated my use case exactly.

Meanwhile, @Tenpoundbass never fucking read the use case to begin with.

I am shocked!

WookieMan says

but it's not 100% clear to be honest.

How so? I only repeated it enough fucking times.

WookieMan says

If they know you live in Milton, FL where you can get a $200-250k house, they pay you less working remotely?

Yup. Most firms do that. They even nail you first the difference between working remotely from home in the Bay Area vs working remotely, say, from Stockton.

AirBnB announced they are not doing that, in contrast.

WookieMan says

You get the job and say you live at 123 Maple Ave in San Francisco at the ADU.
You get your 6 figure job in CA and have a cheap house/COL somewhere else.
If married spouse can work in FL and have no income tax, while you still technically live in CA and pay their taxes.

Yup. Pretty close to what I stated. Yet somehow @Tenpoundbass thinks that all translates into installing 'remote access' (his bullshit words. Not mine.) In a shed in the backyard or some crap like that.

WookieMan says

On the business side you're renting out a single ADU to multiple people in CA and raking in some income

No. ADU owner is renting it out to another legal entity where all that extra income is on those books. LLCs make more than $15k month all the time.

ADU owner only charges that entity for the single lease, at market rates for that unit.

ADU owner won't get flagged for audit. Not for that, at least.

And if they do, so what? They cough up the rent payment records or even the copy of the lease with the entity.

The entity will be deducting the cost of that rent it pays to the ADU owner anyway.

WookieMan says

IRS will flag that shit in a second if 50 people write off a lease at the same address and it's discovered it's an ADU.

Why? Why would the IRS give a flying shit? Local zoning and residency limits enforcement is not their beef. They only care that they get what is taxable from all that and that it isn't money laundering.

And I don't get to write off my apartment lease as it is. Si where do you get this idea of the the 50 ADU dwellers being able to do so?

Even if they are 1099 contractors they wouldn't be able to do so. Only the LLC or S-Corp would. But this use case is for employees, remember.

HunterTits says

Patrick says

There are generally rules against renting to groups where the number of people is greater than (the number of bedrooms + 1).

Could be a problem.

Where is that happening when the landlord is only renting out to a single tenant, the LLC or whatever? :)

The total number of people living in a dwelling are the deciding factor ultimately, no? No matter how you structure the entities in between. Also maybe neighbors will tell on overcrowding? The govt will keep looking the other way for migrants but as soon as fucking white males are profiting from it they will shut it down. Interesting experiment, but I'm sure in most of the bay area it's already violating some short term rental law. I can see it working in big cities with looser laws

Seems there is a fraud argument in there somewhere. These 'workers' really don't reside there as an official address any more than they reside at a hotel they took a hooker to for an hour or a post office box, but are representing it as the address they use during employment for residency and tax purposes. If fraud unwinds the corporate shell, then liability goes right back to property owner?

Avoiding the liability magnet appears onerous and unworkable in the long run, unless there is a babushka doll series of corporate entities that are too expensive to pursue. Who would want to get bogged down in any kind of lawsuit or government agency attention/ suits for $200k a year, and threaten whatever equity might be held in the property proper? The payout would have to be higher, and the risk lower to consider it. It sounds like it is scaling up liabilities against a frail ADU LLC pretense, without an adequate payout. I don't see the long term net vs. risk, effort and potential trouble. It also sounds like a cover operation for foreign labor which could have other legal ramifications.

In Santa Cruz, some Mexicans run an illegal alien 'hotel' across the street that has been there ever since we have had our place. There are cars and trucks all over the place, and two Mexican women who go on 'outcalls' of some kind in a Nissan Rogue. They keep a tight lid on the place, no noise though once in a while a drunk might come out and stumble around. I think the trucks are leased to the migrant illegals who use them to do labor, and it is basically a worker's hostel. I have never seen them get in trouble over it, but who knows, I imagine they do all cash business and employment outcall to keep them 'under the radar'. Once you start getting into SS numbers, tax ID's, 1099's, etc. the can of worms can grow.