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I did read that case and it appears, to me at least, that the court was more concerned about the rent (which was reported on Schedule E) was misreported and the taxpayer petitioned the tax court after the IRS issued a deficiency notice that involved rental deductions that were roughly 3 times the amount of rent reported on Schedule E. The rent received appears to almost be a sidebar (tangential) issue.

<<For example, Son makes annual mortgage payments of $12,000 while the FRV of the property is $42,000, a difference of $30,000. Is Dad's foregone "rent" of $30,000 not a gift to the son?>>   Yes, but the outcome is still the same.   The son is paying $12,000 to the parent and that is reportable income by the parent. The parent is forgoing rent as a gift to the son, but that is not deductible by the parent nor reportable as income by the son.  Technically, the parents would be required to complete Form 709, but there would be no gift tax to pay.  It still leaves the parent with $12,000 income.    Here is the IRS definition of a "gift"   https://www.irs.gov/businesses/small-businesses-self-employed/gift-tax   in the 2nd paragraph of this link:   "You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return."   The "you" in this sitatuion would be the parent.   

@NCperson wrote:   If the son is paying less than FMV, then all the days of usage are "personal use days".   None of the days of usage would qualify as "rent days". That is the critical to the discussion.    Since all the days of usage are "personal use days", then none of the expenses are deductible with the exception of mortgage interest and property tax.  They are deductible, but only on Sch A (if in fact the owner can itemize).   None of the expenses can be deducted on Sch E.   It's a situation that goes on "all the time" and I suspect few report it as income   As you had previously pointed out, §280A is about expenses, not income.  The "personal days" for purposes of a residence for allowing expenses don't affect reporting income.  Income from a for-profit rental is reported on Schedule E, regardless if expenses are allowed or not.   Where are expenses for a for-profit rental reported?  Schedule E.  On a for-profit rental, why would mortgage interest and real estate tax not be allowed on Schedule E?  [EDIT:  Although it MIGHT be dependent on if the taxpayer itemizes; sort of like how it is dealt with on a 8829 for a home office; I would need to look at that again.]   I agree.  

@M-MTax wrote:   For example, Son makes annual mortgage payments of $12,000 while the FRV of the property is $42,000, a difference of $30,000. Is Dad's foregone "rent" of $30,000 not a gift to the son?   It probably is considered a gift, so maybe a Gift Tax return might be required.  However, for purposes of this question about rent, it doesn't matter.   As the court case that Mike provided said, it is still less than FMV based on what the tenant is paying, even if the landlord were to report the full FMV as income.  That court case disallowed that treated and made the taxpayer report the income and did not allow deductions.  If you haven't looked at it yet, you might want to read that court case.

@Hal_Al   - I still do not believe it's Sch E and I submit your question presumes use of Sch E when it is not to be used. Here is why:    If the son is paying less than FMV, then all the days of usage are "personal use days".   None of the days of usage would qualify as "rent days". That is the critical to the discussion.    Since all the days of usage are "personal use days", then none of the expenses are deductible with the exception of mortgage interest and property tax.  They are deductible, but only on Sch A (if in fact the owner can itemize).   None of the expenses can be deducted on Sch E.   Note the definition of what goes on Sch E:  it's "rental real estate", but in this situation all the use is "personal use" so there is no "rental real estate".   So there is no justification to use Sch E.  The money received from the son still gets reported as "other income" - that is still taxable to the owner.     I find this whole topic hard to get through.  It shocks most (and created immense "pushback") that the money paid to the parent is taxable income.  It's a situation that goes on "all the time" and I suspect few report it as income - nor have I ever seen articles that the IRS is auditing / cracking down on this issue.  

@AmeliesUncle wrote: As a side note, the son wouldn't necessarily need to pay more than actual expenses in order to be a for-profit rental.  A for-profit rental includes the expectation of the value of the property increasing.  I agree and it's basically the intention (whether or not there is a profit motive) that controls.

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For those arguing this scenario a different way, most notably @NCperson, how do you account for the difference between the mortgage payment by, say, the son, and the FRV of the rental property (that is not paid)?   For example, Son makes annual mortgage payments of $12,000 while the FRV of the property is $42,000, a difference of $30,000. Is Dad's foregone "rent" of $30,000 not a gift to the son?

@jannettj79    And...thinking about your post some more......and perhaps guessing some about what you might be referring to: __________________________ If she went thru the software section about changing her withholding by preparing a new W-4 form?   1)  That W-4 does not affect her e-filing of 2024 taxes.....and the 2024 tax file submitted doesn't include anything in it about that W-4 form. 2)  The W-4 form she "might" have prepared is a stand-alone paper form that she would print out and give to her employer.    That new W-4 form does not affect the 2024 tax return in any way.....and can be completely ignored and put in the trash if you/she thinks it wasn't properly prepared.   And either/both of you can prepare a new W-4 on your own, to give to either of your employers at any time...IF...if you think you need to adjust the tax withholding from your paychecks.

@Hal_Al wrote: It's my understanding the owner doesn't have to claim depreciation (he's still have to pay tax on the unclaimed depreciation when he sells it).  Section 1250 recapture would be the amount of depreciation deductions actually taken or the amount that were allowed to be taken (whether taken or not), whichever is greater.   If none were allowed to be taken and none were actually taken, then there is no recapture after a sale.

@Hal_Al wrote:   What if the son pays more that the actual expenses (but still less than FMV), resulting in a schedule E profit?   In my opinion, a for-profit rental that is rented below FMV:   Income is reported on Schedule E (not as other income on Schedule 1). Mortgage Interest and Real Estate taxes are deductible on Schedule E. No other deductions (including depreciation not allowed).   As a side note, the son wouldn't necessarily need to pay more than actual expenses in order to be a for-profit rental.  A for-profit rental includes the expectation of the value of the property increasing.  On the other hand, you would also need to factor in the large costs of eventual replacement of roof, siding, driveways, HVAC, etc..

@Mike9241 @NCperson @M-MTax @AmeliesUncle    What if the son pays more that the actual expenses (but still less than FMV), resulting in a schedule E profit?   It's my understanding the owner doesn't have to claim depreciation (he's still have to pay tax on the unclaimed depreciation when he sells it).    [Edit]  Reference: “Presumption of profit. If your rental income is more than your rental expenses for at least 3 years out of a period of 5 consecutive years, you are presumed to be renting your property to make a profit.” https://www.irs.gov/pub/irs-pdf/p527.pdf (pg 25)

Q. Does Turbo Tax provide a way to attach  required documentation to an e-filed state tax return? A. No.   Q. If I'm claiming the Scholarship Donation Credit, on my Ohio return, do I need to attach any documentation to my filed return? A. No. You do not need to attach any receipts/proof with  your return (e-filed or mailed).  The documentation mentioned at the Ohio Dept. of Taxation (ODT) web site is only required if you are questioned/audited by ODT, later.

You cannot cancel an e-file.   You have to wait to see if the return is accepted or rejected.   If the e-file is rejected, then corrections can be made to the return and it can be re-submitted.   If the IRS accepts the e-file, you have to wait for it to be fully processed and then amend if necessary to make corrections.  And....you say your spouse filed "her" return.   Did you file married filing separately?   Why?  That is usually the worst way to file.   If you were  married at the end of 2024 then a joint return probably would have been a better option.  If you (she) need to amend the return, here is some information about that:     If you were legally married at the end of 2024 your filing choices are married filing jointly or married filing separately.   Married Filing Jointly is usually better, even if one spouse had little or no income. When you file a joint return, you and your spouse will get the married filing jointly standard deduction of $29,200 (+ $1550 for each spouse 65 or older)  for 2024. You are eligible for more credits including education credits, earned income credit, child and dependent care credit, and a larger income limit to receive the child tax credit.    If you choose to file married filing separately, both spouses have to file the same way—either you both itemize or you both use standard deduction. Your tax rate will be higher than on a joint return.    Some of the special rules for filing separately include: you cannot get earned income credit, education credits, adoption credits, or deductions for student loan interest. A higher percent of your Social Security benefits may be taxable. Your limit for SALT (state and local taxes and sales tax) will be only $5000 per spouse. In many cases you will not be able to take the child and dependent care credit. The amount you can contribute to a retirement account will be affected. If you live in a community property state, you will be required to provide additional information regarding your spouse’s income. ( Community property states:  AZ, CA, ID, LA, NV, NM, TX, WA, WI)    If  you are using online TurboTax to prepare your returns, you will need to prepare two separate returns and pay twice since with online, you get one return per fee.     https://turbotax.intuit.com/tax-tips/marriage/should-you-and-your-spouse-file-taxes-jointly-or-separately/L7gyjnqyM?srsltid=AfmBOopGqCNexowW0pYgvsf7ycIkrx4VjO_63UXv6vSnfu3UEGQiKQTh   https://ttlc.intuit.com/turbotax-support/en-us/help-article/income/getting-married-mean-taxes/L2RgmagpE_US_en_US?uid=m69on7t0  

@manohar-nimmagadda18  If you efiled, first double-check to be sure that the state return was indeed accepted.   If prepared in Online TurboTax, you can log in, and at the Tax Home, which of these terms is used for the status:  accepted, rejected, printed, started, ready to mail, or something else?   If accepted,  see this FAQ for info on your state's refund lookup tool:   Choose your state from the table in this FAQ: FAQ:  How do I track my state refund? https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-refund/track-state-refund/L3jgO8PGs_...   If needed: FAQ:  How do I contact my state department of revenue? https://ttlc.intuit.com/turbotax-support/en-us/help-article/state-taxes/contact-state-department-revenue/L9qVToi02_US_en_US ‎

Addendum: Just noticed you may be using Free Edition, which does not include free phone support.  If the maneuvers above don't work, and if the phone system doesn't let you reach them by phone, then another way to reach Support if you have social media, is to direct message a Support agent:, https://x.com/TeamTurboTax or https://www.facebook.com/turbotax