NECPA in NEBRASKA Posted February 17, 2015 Report Posted February 17, 2015 A client called me today wanting to take the house that they purchased for their daughters and boyfriends to live in as a loss. Only the boys pay any rent and it's not FMV. I said that they have to report the rent and can not take a loss as it's considered personal usage. If the rent is not FMV, the whole house is considered personal, correct? I just want to make sure that I'm right before I call her back. I told her that I was 95% sure that she could not take a loss. Thanks! Quote
Lee B Posted February 18, 2015 Report Posted February 18, 2015 1. As far Schedule E, the deduction of expenses are limited to income ( No Loss ) because of the facts you cite. 1 Quote
SFA Posted February 18, 2015 Report Posted February 18, 2015 renting below fmv to family or friends can be acceptable if there is the expectation that the property will be cared for in a way that strangers will not. Quote
NECPA in NEBRASKA Posted February 18, 2015 Author Report Posted February 18, 2015 I know that, but their kids are paying nothing and the boys are just paying way under FMV because they are college kids. Quote
Jack from Ohio Posted February 18, 2015 Report Posted February 18, 2015 No loss. Expenses cannot exceed income. You are correct in your assessment. 2 Quote
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