Hi,
We have elderly parents who:
- are living in our house
- pays us monthly "rent"
- my spouse provides caregiver services to them (taking them to doctor offices, doing their laundry, etc) and is not able to work a full time job given their needing my spouse's day to day support
- are not considered dependents in our tax return (given their income above the dependent threshold)
How should we treat the monthly "rent" in our tax return (rental income)? Is it considered a gift, given it is below the 2022 $16,000 threshold? I see this section in IRS' caregiver FAQ - does this mean I do not need to report this "rent"?:
Answer:
An amount of money that your parents give you to offset their expenses isn't taxable to you. This amount is treated as support provided by your parents in determining whether your parents are your dependents.
Thanks!
