Tenant paying below FMR, is difference subject to tax?

[AZ-Tax]

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?

[ATSMAN]

No. If yes then I am in trouble!

[David1980]

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.

[ATSMAN]

I don't think the OP mentioned if the landlord was also the taxpayer's employer. OP can you clarify?

[Burke]

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.

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?

[AZ-Tax]

Answers

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?

POA is Son of TP, tenant is Son of POA or TP's grandson. Not aware of tenant doing any repairs, maintenance, management etc.

[David1980]

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?

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.

POA is Son of TP, tenant is Son of POA or TP's grandson. Not aware of tenant doing any repairs, maintenance, management etc.

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.

[taxea]

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.