1099 for hosting exchange student

[kathyc2]

This is the second 1099misc box 7 I've received for a host family. Also, the first year I've ever received one.

On the first one I quizzed client and we were able to come up with out of pocket expenses for such things as food, dining, per mile transportation, percent of utilities based on people in house, etc to get the amount to zero on a Schedule C.

Is this the correct way to handle the 1099?

[Rapid Robert]

This is the second 1099misc box 7 I've received for a host family. Also, the first year I've ever received one.

Is this the correct way to handle the 1099?

Who is paying this family? Is it a post-secondary student?

High school foreign-exchange students would be sponsored by a charity, I think, so why would there be any payment received? Or is it a for-profit program?

TheTaxBook mentions a charitable, not business, deduction under specific circumstances,

"Student living expenses. A taxpayer can deduct up to $50 per full calendar month of qualifying expenses for a foreign or American student who meets all three of the following requirements. Any month during which all three of the following conditions are met for 15 or more days counts as a full month.

1) The student lives in the taxpayer’s home under a written agreement with a qualified charitable organization as part of a program to provide educational opportunities for the student.

2) The student is not the taxpayer’s relative or dependent.

3) The student attends a U.S. school full-time in grade 12 or below."

[kathyc2]

Not an authoritative source, but it confirms my assumption of how to handle it.

https://www.homestaynetwork.com/hosting/homestay-tax-questions/

[Rapid Robert]

OK, so not a charity, like American Field Service (AFS) is.

[John of PA]

It is not uncommon to be paid to host an exchange student. If it is reported on a 1099, I do not see a problem with deducting valid expenses against it (not % of home, but direct expenses).

[taxea]

I agree. Income on 1040 Ln 21 not subject to SE and expenses as a donation.