No. You do not subtract the $6000 you received for rent from your Housing Allowance. You must include in your gross income, all amounts you receive as rent. Rental income is any payment you receive for the use or occupation of property.
Special rules apply to renting below market value. The Tax Cut and Jobs Act eliminated the partial deductions of rental expenses. Taxpayers no longer may take a deduction for the expenses on property, like utilities, when renting below market value. The rent received on a below market rent are rent cannot be report on Schedule E. IRS Pub. 527, page 16 explains the rent is reported on Schedule 1, Line 8z “Other Income”, where it is combined with other tax items on Line 10.
Use the following steps to report the income from rent:
- Go to Federal > Income & Expenses.
- Less Common Income.
- Miscellaneous Income, 1099-A, 1099-C > Start /Update.
- Other reportable income > Start /Update.
- Answer "Yes for the question," Did you receive any other taxable income?"
- On the next screen, enter a description and the amount for your rent income.
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