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Discussion Forum Index --> Basic Tax Questions --> Rent Expense for Child Care Provider
Discussion Forum Index --> Tax Questions --> Rent Expense for Child Care Provider
BW2732 (talk|edits) said:
| 13 March 2008
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| I have a client who's mother cared for her three-month old child for about three months; ie grandma cared for her granddaughter. (All eligibility tests to claim this credit are met.) During this time, my client paid around $2300 in rent expense for her mother's apartment, because grandma lives out of state and was in the area soley to provide the care for her granddaughter. Grandma did basic chores around the house (cleaning, laundry, etc.) but was not paid for any of her services. According to Pub 503, lodging for this type of situation is deductible. If I enter the $2300 on form 2441 with grandma's name and ss# as required on the form, how does she avoid being hit with an income tax liability, since the $2300 wasn't actually paid to her? It seems incorrect to classify the rent as income to grandma. Any thoughts would be appreciated. Happy tax season!!
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Iaklein (talk|edits) said:
| 14 March 2008
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| I would consider the payments to Grandma a gift...and that there would be no write off on the 2441 for this arrangement
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BW2732 (talk|edits) said:
| 14 March 2008
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| Thank you laklein for responding. There were no actual cash payments to grandma. My client only paid for grandma's rent (directly to the lessor - client said she has the canceled checks to prove this). Does the IRS consider caring for your grandchild a gift? Granted, most grandparents might think so, but if not for grandma, my client would've had to pay for deductible daycare. Maybe this deduction doesn't go on 2441? Thanks again for your input, and hello from Dutchess County :)
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