Client, couple, bought a house in 1970 for 5,000. and had it moved onto a lot they owned
and moved in.
In 2004, the couple moved out of house and turned it over to son & wife in exchange
for the son & wife to fix it up, repairs, improvements, etc.
The "renters" then spent about $8,000. in 2004 in new appliances, fixing up the bath
bedrooms, etc.
In 2005, they spent very little in order to build their cash back up.
Then in 2006, the renters added fence, new roof, etc.
How would this be handled on the 2004, 2005 & 2006 income tax return of my
clients, the parents?
As rental income, with the cost of improvements being the rent? A flat rate per
month, or just forget about it?
Your wisdom, guidance, and smarts are all appreciated.
Just sitting here in the middle of Tx wishing for rain.
and moved in.
In 2004, the couple moved out of house and turned it over to son & wife in exchange
for the son & wife to fix it up, repairs, improvements, etc.
The "renters" then spent about $8,000. in 2004 in new appliances, fixing up the bath
bedrooms, etc.
In 2005, they spent very little in order to build their cash back up.
Then in 2006, the renters added fence, new roof, etc.
How would this be handled on the 2004, 2005 & 2006 income tax return of my
clients, the parents?
As rental income, with the cost of improvements being the rent? A flat rate per
month, or just forget about it?
Your wisdom, guidance, and smarts are all appreciated.
Just sitting here in the middle of Tx wishing for rain.
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