Message Font: Serif | Sans-Serif
No. of Recommendations: 0
I'm not sure why you would even go through the hassle of reporting it.

Perhaps the writer is an honest US citizen who wants to pay his fair share of taxes and wants to know the legal way to collect a portion of the expenses for the home, but that will cost him the least amount in taxes. Besides, if he's ever audited, the first thing IRS will look at will be his bank statements and other sources of income to make sure he
has reported all his taxable income.

- My parents will be paying my brother's share of the rent and are willing to give me a lump sum when I close on the house. Could that be considered a gift instead of rent? My brother will not have a lease, but my friend will.

- Could I arrange for my roommates to pay 100% of the utilities (in exchange for lower rent), reducing the amount of money that I receive? Or are they not allowed to pay more than their 1/3 share?

The "gift" from the parents could be treated as such, but your parents will have to file a gift tax return. Probably no tax will be due, but it will be proof for you that the money received was indeed a nontaxable gift.

As for your roommates paying the utilities and thus lower rent. A least agreement for less than 80 of FMV will mean the maximum you could write off would be the amount of rent you receive - hence no tax benefit.

Actually you would do better if you sat down with a tax professional who could review your whole tax situation to see what tax favored options may be available to you.

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.