Not for profit rental income under $15k

Forum|Forum|4 years ago
April 15, 2022
2 replies
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I own a duplex and my significant other lives in one half. I charge below fair market value making it a personal use property. The “rent” they pay is below $15,000 per year (total of $6000) Can I consider this a non/taxable gift or do I need to report it as other income?

RypleyAuthor

I should also mention that the fair market value would be about $12,000 per year, which is still under the acceptable amount of non taxable gifts, so I don’t believe any “gift giving” I am doing would be taxable as it also falls under the $15,000 annual threshold.

Carl11_2

Employee

It's other income. You can't consider it a gift, because you are providing something in return for that money.

RypleyAuthor

Dang. And I can’t offset the expenses by deducting mortgage interest and taxes because it’s not considered a rental if I charge below market value? So I basically have to pay the IRS extra for being generous is what it sounds like.