I have a personal tax preparation question.
I own a rental home with my mom who lives with us. I file married filing jointly (with my wife). My mom is 71 and gets less than $300 a month in social security.
She gets $7,700 in rent and I keep around $4,000 annually because she put a larger down payment than I did although I pay mortgage and all the expenses and I manage the rental house - this is all mutually agreed upon.
I realize that it would be beneficial if I do NOT show her as a dependent because if I do then she has to file a tax return since the requirement for filing for a dependent 65 years or over and Single according to my calculation comes to only around $2,300 of gross income. She did have some $2,200 in interest money earned as well.
So with rent income of $7,700 and interest income of $2,200, am I correct that she does NOT have to file a tax return because the requirement for filing a tax return for over 65 years and Single is $10,050 if she is not a dependent of mine? I assume her around $3,600 of social security would not factor in, correct?
If I show a small share of rent on my tax return compared to her - $4,000 to her $7,700 while me picking up all rental expenses, will that raise questions by the IRS or State?
Thanks in advance for your help.