If taxpayer receives tax-free employer-provided lodging in a privately-owned (non-profit) senior care facility, does that count as "paying rent" for purposes of the Calif. renters credit?
If the facility is already exempt from property tax (which I do not know), then it's moot, no renter's credit. Otherwise, it depends on whether the tax-free income in the form of free lodging is still considered a "payment", my guess is "yes".
-Mark Bole
If no money changed hands, there's no rent paid; thus no credit.
Non-profit organizations don't pay property taxes if they own the property.
Does not the renters credit require that you actually paid rent?
So if TP wants the renters credit, the value of the rent would have to be recaptued into earned income. Not a good idea!
Dick
Thank you Dick and D. Stussy. My initial take also was "no", and that's how it ended up on the client's return, but when I later could not find a clear statement in the FTB docs, I got to thinking (always a dangerous pastime!)
On the year-end statement accompanying the W-2, the value of meals/lodging was in fact included in gross wages, but then subtracted out just like Sec. 125 deductions to arrive at the Box 1 amount.
I'm not sure that rent payments must always be in the form of cash, after all many discussions here have revealed that bartering of services for rent is in fact income (to both landlord and tenant) in most cases.
What makes the CA renter's credit different, is that it is based indirectly on *property* tax (homestead exemption), not income tax, so the fact that tax free income (value of labor) is used to pay for rent might not matter in the end.
Oh well, I have some additional reference material to yet look at, and maybe Katie J. will come along with the definitive answer, as she so often does! ;-)
-Mark Bole
Agreed as to the tenant who must declare the barter as income possibly subject to Schedule C. OTOH the landlord recognizes the barter as income an writes it off as an expense.
That would be true if barter was tax free income.
I don't always agree with Katie. But when I don't she explains why I am wrong.
Dick
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