I purchased my mother's property/house 8 years ago on a 10 yr contract. Her property is immediately adjacent to our house. I rent the house back to my mother at a greatly reduced rate, to help with her finances and furnish some of the utilities. She can not afford the regular rent. This way she can stay in her home, rather than move to a nursing facility, which would require her to go with Title 19 (Iowa) financing. (We charge $300/;month instead of the average for our county of $975. for a 3 bedroom house)
Turbo Tax always suggests that we are not charging the proper amount for rent.
I have always treated this property as a rental property. Should I be treating this as a guest house?
Should I be deducting the difference in rent as a loss?
