Renting to Relatives

[JenMO]

Father rents to son for 0, and to daughter for less than market value. There's been discussion as to expenses only to the amount of rent, and discussion of rent being "other income" and no expenses taken. I've looked in TTB and in Pub 527 - residential rentals and can't find something solid to put my eyes on and print off for client. Just to show client I'm not making this up. Where does it say?

[Gary2]

Look in Pub. 527 under both Not Rented for Profit in chapter 4 and personal use in chapter 5.

[JenMO]

I did look there, but what about renting to relatives, that would be not for profit, but do the relatives fit in this category?

[Gary2]

I did look there, but what about renting to relatives, that would be not for profit, but do the relatives fit in this category?

It's under the definition of "What is a day of personal use?"

[taxea]

Father rents to son for 0, and to daughter for less than market value. There's been discussion as to expenses only to the amount of rent, and discussion of rent being "other income" and no expenses taken. I've looked in TTB and in Pub 527 - residential rentals and can't find something solid to put my eyes on and print off for client. Just to show client I'm not making this up. Where does it say?

How do you rent for 0? This is personal use of property not a rental. Also rent at under FMV is personal use whether or not the occupant is a relative. Only deductions allowed on either are prop tax and mort interest (on one only) reported on Sch A.