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Ewoo2095
Returning Member

Grandmother wants me to rent out her home and deal with all aspects (receiving the rental income directly, maintenance, etc.). Who claims the rental income on their taxes?

So my grandmother owns a home that she wants me to rent out for her. She does not want anything to do with the process of the rental including taxes. She wants the renters to pay me directly and I would handle all concerns and maintenance. 

From what I have been reading, it seems that she will still have to file the rental income on her taxes and not mine because she is the oldest surviving member in our family trust which the house is under. 

While she wants me to claim the income, we do understand that it might not be possible. 

So is there anyway I can claim the rental income on my taxes and not hers?

4 Replies
Mike9241
Level 15

Grandmother wants me to rent out her home and deal with all aspects (receiving the rental income directly, maintenance, etc.). Who claims the rental income on their taxes?

we can't see the trust document and we are not lawyers. consult with one

tagteam
Level 15

Grandmother wants me to rent out her home and deal with all aspects (receiving the rental income directly, maintenance, etc.). Who claims the rental income on their taxes?

Consult with local legal counsel.

 

See https://www.avvo.com/estate-planning-lawyer.html

 

[some of us are lawyers, but we still cannot read the terms of the trust]

Opus 17
Level 15

Grandmother wants me to rent out her home and deal with all aspects (receiving the rental income directly, maintenance, etc.). Who claims the rental income on their taxes?

If there was no trust:

You are describing an arrangement where you are acting as an agent for the owner.  As an agent, you can't claim depreciation as an expense, only the owner can do that.  You can claim expenses you pay for, but not expenses the owner pays for.  (Who pays the utilities?  Who pays the property insurance?  Who pays the property taxes?)  A more typical arrangement would be something like, you handle the arrangements and keep 50%, and the owner gets the other 50%.  You would file a tax return as a rental agent, and the owner would file as a landlord.  You can adjust the percentages so that you keep most of the money, but the owner needs something against which to deduct depreciation and anything else they pay.   I would recommend tax advice even in this simple arrangement, at least to get it set up properly, and you would want to put the arrangement in writing in some form for mutual protection.

 

Because of the trust, you really need a professional.  And because the trust involves family, you really really need a professional.  Messing it up might cause emotional injuries that would be hard to heal.  The grandmother might not be allowed to rent, or the trustees might be entitled to split the income.  Or the trust might only be to protect the home while she lives there, and moving out might trigger a requirement to sell or some other provision. 

 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
TomD8
Level 15

Grandmother wants me to rent out her home and deal with all aspects (receiving the rental income directly, maintenance, etc.). Who claims the rental income on their taxes?

If the home is owned by the family trust, you may find this web reference informative:

https://pocketsense.com/taxation-rental-properties-family-trust-8749925.html

 

Note that rental income from a home owned by a family trust is reported on a trust tax return, IRS Form 1041.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
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