Foreign Exchange Student

[Snaggletooth]

A charity sponsored a foreign exchange student from somewhere in Eastern Europe. The agency paid my client $5000 to room and board this student for three months.

Can't find anything in TTB which addresses this. Does this fall under the category of "all income from any source except as exempted?"

The agency sent a 1099-NEC. If this is indeed reportable income at all - should it be "Schedule C" income? Rental Income? "Other" income?

Thanks in advance...

[TAXNJ]

See if TTB pg 4-16 helps. Also, pg 1-28 (social security and Medicare tab).

non TTB info: https://www.pktaxservices.com/blog/d...change-student

[Snaggletooth]

Thank you TAXNJ. I read the TTB which allows a charitable deduction of $50/month. (which is worthless if taxpayer must take the std deduction). Nothing in the TTB explains whether the income is reported.

Thanks anyway.

[TAXNJ]

Thank you TAXNJ. I read the TTB which allows a charitable deduction of $50/month. (which is worthless if taxpayer must take the std deduction). Nothing in the TTB explains whether the income is reported.

Thanks anyway.

Try this:

https://knowledge.studentroomstay.com/homestay/homestay-tax-questions

[Snaggletooth]

Great link and info, TAXNJ. Thank you very much...

[TaxGuyBill]

However, that link assumes it is a "business". I don't know this, but I suspect many situations would not be considered a business. So you would first need to analyze the situation to determine if it is a business, hobby/other income, rental property or something else.

[Rapid Robert]

"Does this fall under the category of "all income from any source except as exempted?""

Yes. There are no exceptions for this income.

As some of the previous links have discussed, it is possible that there may be deductions available other than the $50/month charitable deduction, which has many restrictions. I'd go with the general principle that expenses of producing taxable income are deductible, but I wouldn't be greedy about it, deducting only direct expenses of the student, not anything indirect.

I would report the net income as "other income" on Form 1040, not subject to SE tax.

[TAXNJ]

One more to view. You can always call an agency to ask about tax treatment.

Tax Considerations to Think About. (See toward bottom of the article)

https://blog.studentroomstay.com/make-an-income-from-hosting-foreign-exchange-students