Hello:
I have seen variation of this asked many times but don't see a clear answer to our situation.
My son began receiving SSI disability benefits earlier this year. On advice from a special needs attorney we had our son sign an agreement stating he was paying us "rent" (per the attorney). We sent a copy of the letter to SSI.
In filling out TurboTax I have the option of stating the rent is FMV, and filling out schedule E, so I am including rent as income but offsetting with utility, taxes insurance etc. I effectively zero out the income with expenses (not exceeding the amount of rent received), which is easily done with our expenses. In actuality however we are not charging near actual FMV for his room and use of the house.
Another option is saying we are charging below FMV, but it has add the rent as misc income. In this case the only way to offset the income is to itemize, which we do not do (we have no mortgage, and deductions would be minimal, so we take the Standard Deduction.
Am I safe to use Schedule E to list expenses to offset the rental income, even though I am not charging FMV?
Thank you!
Chris M
Maine
