Not reporting rental income

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Subject Author Date Not reporting rental income Alex M 07-28-2007  Re: Not reporting rental income Dick Adams 07-29-2007  Re: Not reporting rental income Phil Marti 07-29-2007  Re: Not reporting rental income Brew1 07-29-2007  Re: Not reporting rental income John L 07-29-2007  Re: Not reporting rental income joetaxpayer 07-31-2007  Re: Not reporting rental income Mike 07-29-2007  Re: Not reporting rental income rlsusenet@NOSPAMPUHLEEZsc... 07-29-2007  Re: Not reporting rental income Bill Brown 07-29-2007  Re: Not reporting rental income John H. Fisher 07-29-2007  Re: Not reporting rental income Mike Wellman 07-29-2007  Re: Not reporting rental income ed 07-31-2007  Re: Not reporting rental income ChenangoBusinessServices@... 07-31-2007  Re: Not reporting rental income Benjamin Yazersky CPA 08-01-2007  Re: Not reporting rental income None 08-01-2007  Re: Not reporting rental income ed 08-03-2007  Re: Not reporting rental income Stuart Bronstein 08-04-2007
Posted by Alex M on July 28, 2007, 2:28 am Please log in for more thread options One of my colleague was mentioning that he rented his property and did not report the rental income since he was barely breaking even. According to him there is no direct way the IRS will be able to find out the actual rentals received. Is it right? If that is the case everyone will do it, right? Thanks LV << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Dick Adams on July 29, 2007, 10:11 pm Please log in for more thread options > One of my colleague was mentioning that he rented his > property and did not report the rental income since he was > barely breaking even. According to him there is no direct > way the IRS will be able to find out the actual rentals > received. > > Is it right? Do you really need to ask about the difference between right and wrong? Your colleague is playing the audit-lottery where the enrty fee is free, the winnings are minimal, and the cost of losing can be very high. I know of a hog farmer who got three years in the slammer over $5,000 of unreported income - not to mention the back taxes, the interest, the penalties, and the attorney fees. << ------------------------------------------------------- >> << The above is intended for educational purposes only. >> << It does NOT constitute legal OR professional advice. >> << It cannot be used by any taxpayer, for the purpose of >> << the purpose of avoiding penalties that may be imposed >> << upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Phil Marti on July 29, 2007, 10:11 pm Please log in for more thread options > One of my colleague was mentioning that he rented his > property and did not report the rental income since he was > barely breaking even. According to him there is no direct > way the IRS will be able to find out the actual rentals > received. > > Is it right? Time will tell, won't it? If he's dumb enough to tell you this, he's dumb enough to tell it to someone he's peeved, who will tell IRS, etc. That's one way they could find out. What's really stupid is that if he's barely breaking even in cash flow he probably has a loss for tax purposes. I wouldn't tell him. -- Phil Marti Clarksburg, MD << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Brew1 on July 29, 2007, 10:11 pm Please log in for more thread options > One of my colleague was mentioning that he rented his > property and did not report the rental income since he was > barely breaking even. According to him there is no direct > way the IRS will be able to find out the actual rentals > received. > > Is it right? If that is the case everyone will do it, right? He is required to report the income--it's the law--he is filing a fraudulent return when he doesn't. If that's not good enough for him, he should consider these three factors: 1`) a perusal of his bank account, property records, or an audit would reveal the issue. There is no statute of limitations on fraud. 2) he might benefit from filing a Schedule E--up to $25,000 in annual losses can be taken on rental property if certain criteria are met. 3) The IRS is always looking at methods of narrowing the tax gap (the difference between what is collected and what should be collected) with new reporting requirements and new software. << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ------------------------------------------------------- >> Posted by John L on July 29, 2007, 10:11 pm Please log in for more thread options > One of my colleague was mentioning that he rented his > property and did not report the rental income since he was > barely breaking even. According to him there is no direct > way the IRS will be able to find out the actual rentals > received. > > Is it right? If that is the case everyone will do it, right? Unless the tenant reports it, which is unlikely unless the tenant is a business, it's hard to see how they'd find out unless they audited him and started going through his bank account statements. Maybe not even then if he doesn't deposit rent checks and cashes them instead. I know casual landlords around here who don't report the income, but don't treat the property as a business and so don't deduct the expenses either. The extra taxable income if they reported it all would be insignificant. R's, John << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted rental income + rental mortgage + rental mortgage interest - dazed /confused April 11, 2006, 3:50 am S-Corp income reporting December 8, 2006, 2:26 am Reporting income from NQSO without a W-2 April 8, 2008, 9:57 pm Reporting Income from Unusual Job Situations February 14, 2008, 11:04 am self employment income reporting error ... help please! 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