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Assessing Tax Implications of Charging Rent and Repair Expenses to an Adult Child in Idaho

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Location: Idaho  |  Law type: tax attorneys
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when my adult daughter lives wih me and i charge her living expenses and she pays for repairs do i have to claim that as income on my taxes

my daughter and her boyfriend live with me with their child.i charge them 200 a month for living expenses and sometimes they pay for repairs.do i have to claim this on my taxes.

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Legal Solution

The response provided below is specific to tax attorneys in the jurisdiction of Idaho. If the response is inadequate, please submit a detailed inquiry.

Assessing Tax Implications of Charging Rent and Repair Expenses to an Adult Child in Idaho

The situation you've described brings up pertinent questions about tax obligations. In many jurisdictions, when you receive a payment, whether in the form of rent or compensation for expenses, there's often a question of whether it should be declared as income. Given that your daughter and her family are living with you and you charge them for living expenses, as well as they occasionally pay for repairs, the nature of these transactions and their implications under Idaho tax law should be carefully evaluated.

Relevant Statutes and Resources:

Potential Solutions:

If you're charging below the fair market value for the living space, it's possible that this might not be classified as a rental income. However, if the amounts collected are deemed rental income, they might be taxable. On the other hand, if these collections are simply a cost-sharing arrangement (i.e., a contribution towards household expenses and not profit), it might not be considered taxable income.

Tax Deductions: If you are required to report this as income, you may be able to deduct certain expenses related to the property, like the cost of repairs that your daughter and her boyfriend pay for. However, proper documentation is crucial.

It's strongly recommended to find the right lawyer who specializes in taxation in Idaho to guide you through the specifics of your situation.

Average Prices for Legal Consultations in Idaho:

Service Average Cost
Initial Tax Consultation $250 - $350
Detailed Tax Assessment $600 - $850
Ongoing Tax Advisory Service $120/hr - $200/hr
Property and Rental Income Tax Filing $450 - $650

Note: These are just average prices and can vary based on the attorney's experience and the complexity of the situation.

Clarification and Action:

While I've provided a general overview based on the information presented, there might be specifics of your situation that could change the advice or strategy. It's essential to get a comprehensive understanding to make informed decisions. Consider reaching out to an expert to compare lawyers in your area.

Questions for Further Clarification:

  1. Duration of Stay: How long has your daughter and her family been living with you?
  2. Expense Breakdown: What is the breakdown of the $200/month? Is it primarily for utilities, mortgage, or other expenses?
  3. Repair Payments: How often do they contribute to repair payments, and what's the average amount?

Frequently Asked Questions in Idaho Regarding Rental Income:

How do I determine if the money I receive is considered rental income?

If you're charging fair market value or making a profit, it's likely considered rental income. However, if you're merely splitting costs without profit, it may not be.

Can I deduct expenses related to the property if I report rental income?

Yes, typically expenses like repairs, utilities, and even a portion of the mortgage might be deductible. Consult a tax expert for specifics.

How do I handle security deposits in Idaho?

Security deposits aren't considered income if you plan to return them. If any portion is kept due to repairs or unpaid rent, that portion may be considered income.

If my family member is living with me rent-free, do I need to report anything?

Usually, if no money changes hands, there's no income to report. However, other considerations, like the fair rental value, might come into play.

Do I need to report if I'm merely receiving money to cover mortgage expenses?

If the amount received exceeds half of the monthly mortgage and other associated costs, it might be seen as profit, making it taxable. Always consult with a tax professional.

Remember, while this provides a general overview, it's always best to consult directly with a legal professional about your specific circumstances.

Disclaimer

This content is for informational purposes only and does not establish an attorney-client relationship. It's always recommended to consult with a local attorney about your specific situation.

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