Does rent from disabled son who lives at home with parents need to be claimed as income? Is it treated like a rental with depreciation, etc.?

[shinyplum]

In order for our developmentally disabled son to receive the maximum SSI benefits, we had to say we are charging him rent, since SSI counts "in-kind support and maintenance" as income for him, and it would greatly reduce his benefit if we didn't charge him rent.  ($300/month, less than what a stranger would pay).  We are his parents and legal guardians, and he lives in our home.  Do we need to claim this $300 per month?  If so, how do we go about it? Do we have to depreciate our house as if it were a rental? We do gift most of the money back to him in the form of airplane tickets to relatives' houses throughout the year, and the rest is used for the needs that the remaining SSI doesn't cover.

[view2 · Accepted solution]

If you are not renting out the property to make a profit, you would report the rental income as other income on your tax return (line 21 of Form 1040).

That should satisfy all parties for reporting.

If the property is your main home or second home you could deduct your mortgage interest, mortgage insurance premiums and real estate taxes as itemized deductions on Schedule A. 

NO depreciation because Schedule E is not required.