Can rental income with no lease be considered a gift?
I have a friend living with me that helps me pay the mortgage bill each month. There is no lease agreement. If the other individual considers it a gift to help with the mortgage, can it be seen as a gift and not rental income?
1 Answer from Attorneys
Re: Can rental income with no lease be considered a gift?
The general rule is that money from a non-relative tenant when you also live in the premises is considered imputed income for income tax purposes. That means that you may not have to report it as rental income for income tax purposes. However, if the amount of the rent exceeds the $11,000 annual gift tax exclusion you may have a gift tax problem. You should be aware that you need to talk to a tax professional about this before you rely on it in any way as there are several factors that must be considered. This posting is not to be considered legal or tax advice. Good luck.
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