Where can I report Real Estate taxes on a rental property that I rent out to a relative below fair market value?
I own a house that I rent out to my mother. As the rent is below fair market value, Turbo Tax tells me that I can't report it under Real Estate income/expenses, and that I should report it in a 1099-MISC. Where then can I report the property taxes I've paid on this rental property?
If you are renting at below fair market value you would report the revenue as other income on line 21, deduct mortgage interest and property taxes on Schedule A.
By: TurboTaxAndrea2
When you rent below fair market price, you would be considered to be renting "not for profit."
If your expenses (mortgage interest plus property taxes) were more than the rent you received, you are not required to report the income.
Otherwise, the rental income for this period is reported as Miscellaneous Income in the Less Common Income section at the bottom of Wages & Income.
If this is a "second home", property taxes and mortgage interest may be included as Itemized Deductions (Your Home under Deductions & Credits).
If the rental income exceeded the property taxes and mortgage interest for the property, you may deduct additional costs associated with the house as miscellaneous itemized deductions (Other Deductible Expenses under Other Deductions & Credits). The total of property taxes, mortgage interest, and other expenses that you deduct cannot exceed the amount of rental income you received.