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Financial Planning / Tax Strategies
|Subject: Re: Buying Second House for Parents||Date: 10/28/2013 9:32 AM|
|Author: irasmilo||Number: 119418 of 121572|
If your parents can qualify as your dependents, you shouldn't need to be concerned about fair market rents, gifting or a schedule E. Like minor children, they would be your dependents that you could claim as dependents on your tax return.
Just a note for people who tend to grab one post and run with it. This is the first time in this thread that the issue of dependency has been raised, and it carries its own can of worms. I'm not so convinced that dependency eliminates any gift tax consideration. Pros?
The answer may be "It depends". See http://cbapp.csudh.edu/faculty/accounting/rmalamud/Elder0501... for one opinion. According to the author of this article, there is no clear resolution to this question in IRS regs/Rev. Ruls. but he relies on a proposed, but never adopted, reg to exempt "expenditures ... in satisfacton of (one's) legal obligation to provide ... support". At the time of the writing of this article, 30 states required children to provide support for indigent parents.
It is apparent to me that if an answer to this question is important, you (the reader, not necessarily the OP) should seek out competent professional assistance from someone who can do all of the necessary research as it applies to the specific details of your situation.
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