Multifamily home.....one fair market, one family member

Forum|Forum|1 year ago
March 20, 2025
1 reply
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I own a 2 family second home.

One unit rented at FMV

One unit rented to my son...he collects rents/does snow blowing/lawn mowing/trash and general maintenance in return for lower rent..

How do I enter this on tax forms?

Thank you

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AnnetteB6

Since your son is providing services to you in exchange for reduced rent, the value of his services is considered to be rental income to your property. On the flip side, the value of the rent he is receiving in exchange for the services he provides is considered to be self-employment income to him.

So, if this puts you in a situation where the total 'rent' received from your son is at the fair market value rate, then you can report the rental income and expenses all together as a single property.

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Cinrn64Author

Hi Annette

Thanks for your help.

Can I combine the 2 rental income (upstairs and downstairs which is my son's );to make one fair market value or are they to be entered separately?

Thanks

AnnetteB6

If his rent/barter payment is sufficient to be considered a fair market value rent, then you can enter the property as one multi-family property instead of needing to separate it into two units. This way you enter the total rent received, including the barter payment value, and you are depreciating the whole property instead of separating it into two properties.

If his rent/barter payment is below the fair market value for rent in your area, then you will need to separate it into two properties.

@Cinrn64

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