FMV rent - revisited

[Gretel]

Employers requires employee to live close by to be available 24/7 and gives him rental house. Now I will show no rental income but legitimate expenses on Sch. E. Maybe this will convert rental to business expenses?

[ED SMITH]

How can you claim expenses on Sch E if it is not being rented? Without knowing the full circumstances, it seems that it would be regular business expense. The other side of the coin is that the employee is receiving free lodging, which might have a tax implication..

[Gretel]

How can you claim expenses on Sch E if it is not being rented? Without knowing the full circumstances, it seems that it would be regular business expense. The other side of the coin is that the employee is receiving free lodging, which might have a tax implication..

This is what I was wondering about. The way I understand the free lodging is that if it is for the convenience of the employer than it is not taxable to the employee. It's a restaurant where the employee is expected to show up any time there is a crunch.