W
wallace_cpa
Okay, I've read some of the threads on this topic and there
are so many positions, it's hard to separate them all. I've
got someone renting a second home to their son at below
market value. This is the son's primary residence. Here
are my conclusions:
1) Vacation property rules indicate this situation requires
that the use is deemed personal use and no rental income or
expenses can be claimed on Sch E.
2) Nothing precludes the owner from claiming the interest
and taxes on Schedule A. And,
3) The rent that is received must be claimed as other
income.
Some of the threads I read (one from an ex IRS agent) says
this should be netted out on Sch E, but brought down to zero
with no loss allowed following the "Not for profit" rental
rules. Where should this be claimed then?
What about depreciation. If this property is later sold,
even thought no business deductions are allowed, is the
basis of the property reduced for allowed or allowable
depreciation. I would have to say no, but just thought I'd
check.
are so many positions, it's hard to separate them all. I've
got someone renting a second home to their son at below
market value. This is the son's primary residence. Here
are my conclusions:
1) Vacation property rules indicate this situation requires
that the use is deemed personal use and no rental income or
expenses can be claimed on Sch E.
2) Nothing precludes the owner from claiming the interest
and taxes on Schedule A. And,
3) The rent that is received must be claimed as other
income.
Some of the threads I read (one from an ex IRS agent) says
this should be netted out on Sch E, but brought down to zero
with no loss allowed following the "Not for profit" rental
rules. Where should this be claimed then?
What about depreciation. If this property is later sold,
even thought no business deductions are allowed, is the
basis of the property reduced for allowed or allowable
depreciation. I would have to say no, but just thought I'd
check.