We are buying a home with a finished basement. We intend to add a small studio-type kitchen and have our adult daughter live in the basement area. She will be helping with expenses on-going - about $400-$500 per month. Will this arrangement be considered "renting" for tax purposes? For both her purposes and ours, do we need to create an actual lease agreement and claim this as income on our taxes? Daughter will not have any ownership in the home.
