Renting to my son below FMV. The only home I own but I do not live there. IS this taxable income

pattylovelife — Tue, 20 Jan 2026 00:48:00 GMT

I have read SEVERAL post on this subject but I can't seem to find the right answer.

My question: I rent my ONE and ONLY home that I own to my son for less than fair market value. I pay the HOA, the landscaper service along with all expenses having to do with owning a home, property tax, insurance etc. I do not live in this house that I own, I live with my partner in his house he owns. Is this considered rental income, not for profit income or schedule E income if the funds I receive are greater than the homeowner expenses? OR is this rent cost sharing expenses that are not reportable income to the IRS?

The answers posted by Turbo tax in similar scenarios are a mix of answers. As an example, I copied and pasted one of the of Turbo /Question/tax answers below. So is the below answer true? If so what publication states this to be true. If not true, how do I report this rent that my son pays that is not FMV.

Several Turbo tax responded/answered with cost sharing response. So is this true or false or does family contribution count as reportable rental income? Please let me know.

Question: Family Member lives in my house, and contributes towards mortgage. Do I need to report that money as taxable income?

Turbo tax answer: " Every day that you "rent" to a family member below FMV is considered a day of personal use by you. If you have 14 or more days of personal use, then to the IRS you no longer have a rental property. In that circumstance, if your family member helps pay some of the expenses, then you have a cost-sharing arrangement - not rent. Cost-sharing between family members is not taxable income to you. Your relative isn't paying you; he's paying his share of the bills."

Re: Renting to my son below FMV. The only home I own but I do not live there. IS this taxable income

AmeliesUncle — Tue, 20 Jan 2026 23:53:04 GMT

Assuming you are not legally obligated to support your son, yes, it is taxable income.

A lot of people like the cost-sharing idea, but I've never seen any legal support for it. But even *IF* the cost-sharing idea were true for a person that lives with you, it would NOT apply if they do not live with you.

I know you said that he pays less than Fair Market Value. How much less? For example, it is reasonable to have lower rent for someone that you know is a 'good' renter (like your son). There have been court rulings that have allowed 80% of FMV as counting as close enough to FMV.

This next question may not be an easy question to answer, but is this a not-for-profit rental or is it a for-profit rental? Even if expenses are greater than the rent, you also need to factor in that the house tends to increase in value. After factoring in the increase in value of the home, but then counter-acted by long-term maintenance (roof, furnace driveway repaving, etc.) does the long-term outlook seem like this activity would reasonable result in a profit motive?

The answers to the FMV question and the for-profit question will determine how to report that income.

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Renting to my son below FMV. The only home I own but I do not live there. IS this taxable income

Re: Renting to my son below FMV. The only home I own but I do not live there. IS this taxable income