Multi-Generational Home

Forum|Forum|3 years ago
March 21, 2023
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We are purchasing a home with our adult daughter and plan to claim it as our primary residence while we full-time in our RV. The mortgage will be in our name and our daughter will pay us a portion of the expenses each month. Since it is not an investment property, do we have to claim any of her payments to us as income?

DianeW777

It depends. If you are not actually charging rent to your daughter and she is simply reimbursing you for expenses then there is no rental income to claim on your tax return. If you consider this your main home, or second home, then you can deduct the mortgage interest on your tax return as well as property taxes.

IRS Publication 936

For future use:

If you do begin to charge her rent, and if it is at fair rental value for your area, then you can deduct the expenses of keeping up the rental and depreciate the cost of the home. If, later, you should decide to rent it to her at a lower then fair rental value for your area you would only be able to use expenses to the extent of rental income.