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Old 07-11-2017, 02:33 PM
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Question about rental income received

Hello,
My husband and I own a two family home. We live in one unit and rent the other unit. My mother just sold her home and is going to be moving into our rental unit. Instead of paying us rent monthly she is going to be giving us the proceeds from her sale. It will probably cover almost 8-10 years of rent. How do we claim on our taxes?
Any advice is greatly appreciated!
Thank you!



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Old 07-11-2017, 07:52 PM
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Quote:
Originally Posted by KathrynGA View Post
Hello,
My husband and I own a two family home. We live in one unit and rent the other unit. My mother just sold her home and is going to be moving into our rental unit. Instead of paying us rent monthly she is going to be giving us the proceeds from her sale. It will probably cover almost 8-10 years of rent. How do we claim on our taxes?
Any advice is greatly appreciated!
Thank you!
then you receive so called advanced rent from your mother, so you need to report the whole amount on your Sch E and 1040 when you receive?em from your mother; Advance rent is any amount you receive before the period that it covers. You need to include advance rent in your rental income in the year you receive it, regardless of the period covered. Generally, the expenses of renting your property, such as maintenance, insurance, taxes, and interest, can be deducted from your rental income. basically, You generally must include in your gross income all amounts you receive as rent. Rental income is any payment you receive for the use of or occupation of property. Expenses of renting property can be deducted from your gross rental income. You generally deduct your rental expenses in the year you pay them.



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Old 07-14-2017, 12:47 AM
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Join Date: May 2017
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Is your mother giving you rent in advance or is she giving you a gift? Perhaps you should look into gift tax rules. I am not trying to put ideas into your head, but I think you could make a real good argument this is a gift and not tax.



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