Discussion:Rental income?

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Discussion Forum Index --> Tax Questions --> Rental income?

Scow (talk\|edits) said:	7 July 2007
if i give my parent money to pay mortgage for the house that i am currently live in, does it court as rental income to my parent? the house is under my parent's name and it will eventually give it me later. thanks

Solomon (talk|edits) said:

7 July 2007

As you describe it, yes, it is income to her/him. If what you are paying her/him is less than fair market rental, then it is considered personal use by your parent which means s/he can deduct only interest and taxes on Sch A.

On the other hand, if your payment is fair market rental, then s/he files Sch E and deducts interest, taxes, repairs, depreciation, etc on that schedule.

If done correctly, you would be considered the beneficial owner and there would be no income or deductions to your parent. Equitable or Beneficial Ownership.

DZCPA (talk\|edits) said:	7 July 2007
Give your parent $12,000 as a gift each year. Not rental income this way. They can use the money any way they want including paying a mortgage.

Solomon (talk\|edits) said:	7 July 2007
Is not a gift, to be a gift, given out of love and affection with no moral constraints to do so and expecting nothing in return? Treating it as a gift strikes me as an unacceptable step transaction.

DZCPA (talk\|edits) said:	7 July 2007
Agree, It is not a gift the way it is now. Lots of legal ways he can live there without giving his parent rent thou.

Scow (talk\|edits) said:	8 July 2007
how the IRS can determine is it a gift or a rent? or may be i want to give my parent a living allowances. i use to give my parents money when we were living togather and part of this money was intended for rent but they didn't report it as rental income. any ways do you folds know any irs publication talks about equitable or beneficial ownership besides court ruling or reg codes?

Scow (talk\|edits) said:	8 July 2007
hi, sorry i want to change the question to fit in to the equitable or beneficial ownership. suppose i write a check directly to the mortgage company for half the amounts and my mon pays the other half, can i deduct half the mortgage interest on my tax return? i only live in half the house and the other half is rented out.