Question

What do I need for proof of landlord income?

Forum|Forum|7 years ago
June 4, 2019
1 reply
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We are renting out our house that we moved out last year to my wife's mother. We are taking care of her bills and paying the mortgage directly from my wife's and mom's joint bank account. Is this considered income even though the "rent" is just paying the mortgage? If so, what documentation do I need to show that she is paying rent. I am guessing this must be taxed as an investment property?

Thank you.

TurboTax Premier Online

Z

Zbucklyo

Employee

It depends on whether she is paying a fair market value for the rent. If so, you must treat it as an investment property, and you can deduct the property taxes, mortgage interest, and other rental expenses from the rental income you receive. In addition, you are required to depreciate the property. Otherwise, you can treat it as a second home (not a rental property), and can deduct property taxes and mortgage interest on Schedule A. You don't depreciate the property in that case, nor can you deduct other expenses. See IRS Tax Topic 415

https://www.irs.gov/taxtopics/tc415.html