Do I have to claim income if letting kids cover mortgage that is below fair market value (no profit) after moving out of state? Total amount is below gift limit of 18k.

[Roland11214]

No lease or rental agreement. No new home purchase. Home is our family home that we will go back to.

[DianeW777]

Yes. a 'not for profit' rental is not allowed a negative amount to off set other income. However you must report any and all income.  Unfortunately, since the Tax Cuts and Jobs Act (TCJA) there is no deduction for the expenses.

The not-for-profit rental income is reported as follows and can be found in IRS Publication 527. (Page 25)

Where to report. 

Report your not-for-profit rental income on Schedule 1 (Form 1040), line 8. If you itemize your deductions, include your mortgage interest and mortgage insurance premiums (if you use the property as your main home or second home), real estate taxes, and casualty losses from your not-for-profit rental activity when figuring the amount you can deduct on Schedule A.

Sign into your TurboTax account:

1. Click Federal in the left column 
2. Click Wages & Income at the top
3. Scroll down to Less Common Income. Click Show more
4. Start Miscellaneous Income, 1099-A, 1099-C
5. Start Other reportable income
6. Say Yes to Any Other Taxable Income?
7. Enter a description and amount

[Roland11214]

So the fact that they are relatives (children) in in a family home doesn't make a difference?  Couldn't it be considered a  cash gift  since I'm physically paying the mortgage?

[DianeW777]

Yes, it's possible it could be a gift to family.  In 2023, the annual gift tax limit was $17,000. For married couples, the combined 2023 limit was $34,000.  This means each spouse (if applicable) can give $17,000 per person.

You should seek advice from someone knowledgeable about gifts and gift tax return requirements to be sure you have not gone over the gift limits.

• FAQs on Gift Tax

[Roland11214]

Can you edit out the @ on your reply. I changed my screen name after the first post when I realized my last name was in it. 

[DianeW777]

Absolutely.  I have removed the information in the last post as requested.