I rent a house in to a family member. can I say this as a fair market rental (at a monthly rent of $15K/12) with a $15K gift back to my relative?

[SweetieJean]

Why do you want to do it that way?

[Zbucklyo · Accepted solution]

No, you can't, in order to treat it as a rental property.  It should be treated as a personal use property.  The IRS looks at the substance of transactions, not the form.

[fraknbeth]

I am essentially renting to them at no cost. If I say the rental is below market value, I can't use in my taxes.  If This is possible, it may help my tax situation by allowing more deductions

[Zbucklyo]

It is not possible.  It is not considered a rental property, but a personal use property.  You can still deduct property taxes and mortgage interest to the extent allowed by law.  If you say that you had $15k of rental income when you in fact had none, you are committing tax fraud.