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New Member
posted Dec 14, 2023 4:50:09 PM

Income from a sublet of a rented property

I rented my property to my parents for a nominal (under market rate) rent. They ended up subletting it at market rate to someone else and keeping that rental income for themselves.

 

For my taxes, do I just report the nominal rental income my parents paid me or do I also have to report the income from the sublet my parents did?

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1 Best answer
Level 15
Dec 15, 2023 5:27:37 AM

Renting below market rate means you have  a "not for profit"  rental where the income & expenses  do not get reported on a Sch E.  Income goes on the Sch 1 and the expenses (limited to the income) on the Sch A.  

 

Read all about it ... starting on page 16    https://www.irs.gov/pub/irs-pdf/p527.pdf

4 Replies
Level 15
Dec 14, 2023 5:04:54 PM

Just report the income you actually received. 

Level 15
Dec 14, 2023 5:27:01 PM

As @Bsch4477 said, you only report the income you actually received. Your parents are responsible for reporting any income they received from a sub-let.

 

Level 15
Dec 14, 2023 8:08:03 PM

@lx4 The following thread has conflicting views as to whether the rent is taxable income

 

https://accountants.intuit.com/community/proseries-tax-discussions/discussion/below-fair-market-value-rental-income/00/206583 

 

 

Level 15
Dec 15, 2023 5:27:37 AM

Renting below market rate means you have  a "not for profit"  rental where the income & expenses  do not get reported on a Sch E.  Income goes on the Sch 1 and the expenses (limited to the income) on the Sch A.  

 

Read all about it ... starting on page 16    https://www.irs.gov/pub/irs-pdf/p527.pdf