Tax question. Our step daughter and family may move in with us in October. 2nd floor apartment and

[3Hotdogs]

will pay towards expenses, enough to cover utilities and portion of property tax.


There will not be profit from this.

Is it taxable?

[Turbineguy]

1. Family is not taxable.

If they pay the property tax and itemize, that's deductible.

[spooky3]

2. I don't think that's quite right.

Will the amount they pay you exceed the costs, including allowable depreciation? Would it be fair market rental rate?

A non property owner generally can’t deduct property tax, mortgage interest, etc.

Former IRS auditor here.

The IRS has free publications that are good.

Here is a non-IRS site:

https://certifiedtaxcoach.org/five-tips-to-avoiding-the-tax-hazards-of-renting-to-relatives/

[3Hotdogs]

6. No. They will be contributing equally to the cost of running the house. There will not be excess

into profit. It will be about $800 below market rental.


I will link to the website after work. Thanks for the info.

[spooky3]

8. You're welcome. I think you'll find the answer in that

Article and the IRS publications on rental income, etc.

[3Hotdogs]

7. We will not claim any deductions for operating the house.

It is not a business and has never been used for rental income. We bought it 50 years ago and Three of us owned it. Kids lived here until they moved out.

L and K became legal domestic partners. L died last year and her daughter wants to move in to L's apartment.

Daughter would be considered K's step-daughter.

[euphorb]

3. This is not the place to ask questions like this.

This is a legal question. You have no idea what the qualifications are of anyone who purports to answer. If you rely on an answer and it turns out to be wrong, it may cause legal problems for you. See a real attorney in person and get reliable advice. It will be well worth it. Any good answer would require more details than you have given, and, besides, there could be both federal and state tax implications.

[Deuxcents]

4. I stayed w/ my sister for a couple of years

Her husband had a heart attack n they were building a house so I was “property mgr”. I paid my share of property taxes, insurance but no rent..that’s how we decided n for tax time, I filed short form. No problem. Just keep it simple unless her name is on deeds. Worked for us. He’s thankfully recovered n I came back home.

[PJMcK]

5. Ask an accountant or a lawyer

You'll get informed information.

On an internet chat board, you have no idea of the quality of any advice.

Incidentally, we're sub-letting our apartment (legally) and we intend to declare the rent as taxable income. Why take chances?

Good luck!