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Payment to a family member for "land work"

If you pay a relative for work done on land you both own, is that taxable income for the one receiving the payment?

This is done on a weekly basis.

This relative is an adult.

We have treated it as taxable income, but I was wanting to make sure that is correct.

This individual is not a "self-employed" person, not a "business owner".

Thank you.

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1 Reply
Hal_Al
Level 15

Payment to a family member for "land work"

It depends on more details. There may be no "make sure that is correct" in this situation.  Usually the exchange of money between family members does not constitute income. It's more like gifts.

 

Why are you paying a relative to work on his own property? Is it business property? Investment property?  Are you taking a business deduction or adding the payments to your share of the cost basis?  Are you paying him for half his time or all his time?

 

"This individual is not a 'self-employed' person, not a 'business owner' ".  That's not that clear. "This is done on a weekly basis" tends to lean toward reporting it as self employment, 

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