Client and his brother are co-owners of several rental properties. They inherited the rentals when their mom passed away in late 2005. The brother does not live in the area and is not involved with the properties – in fact, he has stated that he wants nothing to do with the rentals at all and does not want to include them on his return. My client asked how to handle this situation. I told him that since they are co-owners, each should report ½ of the rental activity on their return. If his brother chooses not to do this, that is his choice. Publication 527 would seem to back me up on this as it states that if you own part interest in a property, you must report your part of the income and may deduct your part of the expenses.
Does this sound correct or is there something I am missing? Thanks.
Does this sound correct or is there something I am missing? Thanks.
Comment