Elderly developments, also known as independent living facilities, are properties designed for the elderly that may not contain services associated with retirement centers such as central kitchens and dining areas, and other non-shelter spaces. With HUD 221(d)(4) financed projects, no non-shelter services is a mandatory condition for occupancy. Common use areas in non-shelter spaces (such as a clubhouse) are allowed to have modest equipment in a common use kitchen.
The wages you pay employees and independent contractors, as well as any professional fees, are tax deductible on Schedule E of the tax return. If you work with independent contractors and you pay them more than $600 in a single calendar year, you will have to send and file 1099s for them, since you qualify as a professional commercial real estate investor. This would include things like legal fees, property management fees, and accounting fees.