I know IRC @ 280A relates the Landlord/taxpayer charging below FMR (fair market rent) on residential rental but what about the tenant? If the FMR is $1000/mo and tenant is paying $200 a month, does the tenant need to report the difference of $800/mo as income on their tax return?
-
-
No. If yes then I am in trouble!Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR -
Depends on why. If my employer happens to own an apartment building and he gives me reduced rent in exchange for working Saturdays without pay yeah. If it's more of a gift then no.Comment
-
I don't think the OP mentioned if the landlord was also the taxpayer's employer. OP can you clarify?Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDRComment
-
If the landlord is offering low rent due to the tenant performing any kind of services (like management of the bldg), then it is compensation. Otherwise, why would he do it?Originally posted by David1980 View PostComment
-
Answers
POA is Son of TP, tenant is Son of POA or TP's grandson. Not aware of tenant doing any repairs, maintenance, management etc.Originally posted by Burke View PostComment
-
Exactly my point. Just pointing out that reduced rent could by compensation - depends on the "why" someone has reduced compensation. Same question could apply to anything - even cash. If someone gives me $10,000 cash do I have to report that as income? maybe.Originally posted by Burke View Post
Renting to family at reduced rates is pretty common, and wouldn't make it compensation to them. The same way if grandfather gives grandson a check as a birthday gift for $10,000 it isn't income to grandson.Originally posted by AZ-Tax View PostComment
-
property owner can only take expenses equal to rent or only property tax and mortgage interest equal to rent on Sch A. No tax issues for renter.Believe nothing you have not personally researched and verified.Comment
Comment