Rental Income

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.

Reply to
Vijay Sharma
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You cannot claim her as a dependent. She has too much gross income, assuming your numbers are correct. See IRS Publication 501, which also discusses her filing requirement, if any.

Reply to
Phil Marti

I did not get much response on this. So please can some of you reply to my questions? I would really appreciate.

Thanks.

========================================= MODERATOR'S COMMENT: Please delete all unnecessary parts of the prior post when responding.

Reply to
Vijay Sharma

If the first reply is substantially correct, why should the rest of us bother with it? You have your answer.

Reply to
D. Stussy

My last two questions have not been answered as to whether social security income is part of gross income in determing whether she should file a tax return or not and the question about me claiming

100% of expenses and yet reporting only 34% of rental income.

Thanks.

========================================= MODERATOR'S COMMENT: Please delete all unnecessary material from the prior post when responding.

Reply to
Vijay Sharma

No, it is not. Now, are you going to be really silly and take my word for it or look in Publication 501 like I told you to the first time?

I'll leave that one to the pros.

Reply to
Phil Marti

I think that he wants many replies, so he can consider contrasting opinions and see which is "voted" as most likely. (grin.

And if you're a tax pro under circular 230, that might even constitute "more than 50% likelihood of being sustained. (another big grin.)

ChEAr$, Harlan

Reply to
Harlan Lunsford

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