At the end of 2017 we bought a second home for the purpose
of housing my elderly father. He had
become homeless and was living in his truck.
He has no assets and lives on a small social security check. My father
does not have any ownership interest in the property at all.
He now pays us a nominal rent of $209.00 a month. We cover all utilities plus cable, which are
in our name, for him. The rent is
significantly less than the $1224.00 PITI we pay on the house each month. It is also way below market rate rent for the
house which is about $1132.00 per month.
So, the property is a second home for personal use only.
We will not have enough itemized deductions for 2018, given
new tax laws, to itemize deductions (even with the PITI we pay on the house). Even if we could itemize, and we had enough
expenses against the property to equal the 209 a month in rent, I doubt we
could take the deduction because of the 2% of Gross income stipulation on that
sort of deduction.
My question is whether I need to report my fathers rent as
income to the IRS. I found this link to
a Turbo Tax response to a similar question which implies that I shouldn’t have
to report the rent since it is:
1.
For a Second home in 100% personal use
2.
From a relative
3.
Below market value rent
4.
Less than the monthly mortgage payment on the
house
https://ttlc.intuit.com/questions/3809228-i-have-not-for-profit-rental-income-turbotax-has-prepared-...
However, other things I’ve read do not make this clear. So I would like to confirm with someone whether
I need to report this income or not.
