More bad debt issues

[Kram BergGold]

Mom and son owned a rental property, 50-50. Most years there was a profit of say $4,000. Son never turned any money over to Mom. Mom never reported any rental income and son only reported his 50% share. In 2005 the building was sold and each party got a 1099 Form. Son gave Mom money to pay the taxes on her share of the gain. On her 2005 return Mom deducted the rent she never received and never reported as a non business bad debt. First, I don't think this is correct. How can she claim a bad debt for money never reported on her tax return? If you disagree with me, should the son report the rent he never turned over to her as some type of income on his return?

[ChEAr$]

Mom and son owned a rental property, 50-50. Most years there was a profit of say $4,000. Son never turned any money over to Mom. Mom never reported any rental income and son only reported his 50% share. In 2005 the building was sold and each party got a 1099 Form. Son gave Mom money to pay the taxes on her share of the gain. On her 2005 return Mom deducted the rent she never received and never reported as a non business bad debt. First, I don't think this is correct. How can she claim a bad debt for money never reported on her tax return? If you disagree with me, should the son report the rent he never turned over to her as some type of income on his return?

She can't of course. However, since she had a right to the income, but didn't collect it,
it was a gift back to her son. She should amend to report the rental income in pertinant
years.
Otherwise, how can mom justify any basis in the property against her half of proceeds?

Much needs to be done.

Holiday ChEAr$,
Harlan Lunsford, EA n LA