|
Posted by Ernie Klein on April 17, 2008, 11:48 pm
Please log in for more thread options
> Ernie Klein wrote:
> > I find it absolutely plausible for a tenant to make $6000 of
> > improvements and receive $6000 in rent compensation in return and have
> > no profit at all to show for it.
>
> Sorry, that's not how I interpret the tax law, but disagreements welcome.
OK. I will offer this hypothetical, not exactly my daughters situation
but close.
Daughter and grand kids want a hot tub at the house they rent and there
is a great place to put it. Landlady says she is OK with that and will
pay for the materials (about $5000) but not the labor (about another
$3000 to install a concrete pad and electrical wiring for a hot tub). It
takes my grandkids and myself a weekend to pore the concrete and install
an underground conduct, circuit breaker and wiring (all inspected by the
city of course). We purchase and install the hot tub. The total bill
for materials (not labor) comes to $6000 which my daughter pays out of
her pocket. My daughter and grandkids now have the use of the hot tub
for the remainder of there stay at the rental unit and the landlady has
the increased value to her property.
The landlady forgives $6000 in rent as agreed.
Should a 1099-MISC be issued? If so how would my daughter report it
because her outgo = her income. The only (value) enrichment is the
landlady's. My daughter's only gain is the enjoyment of the hot tub
(but I don't think enjoyment is taxable) and we freely gave our labor,
not for the landlady's enrichment but for my daughters (and grandkids)
enjoyment.
--
-Ernie-
--
<< ------------------------------------------------------- >>
<< 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 (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by Mark Bole on April 18, 2008, 12:06 am
Please log in for more thread options
Ernie Klein wrote:
[...] and we freely gave our labor,
> not for the landlady's enrichment but for my daughters (and grandkids)
> enjoyment.
>
That was a gift.
-Mark Bole
--
<< ------------------------------------------------------- >>
<< 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 (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by Ernie Klein on April 18, 2008, 12:29 am
Please log in for more thread options
> Ernie Klein wrote:
> [...] and we freely gave our labor,
> > not for the landlady's enrichment but for my daughters (and grandkids)
> > enjoyment.
> >
>
> That was a gift.
>
Agreed.
But if the landlady issued a 1099-MISC like in the case of the OP, then
how should it be handled? That's the question I was trying to get to.
--
-Ernie-
--
<< ------------------------------------------------------- >>
<< 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 (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by Mark Bole on April 18, 2008, 12:24 am
Please log in for more thread options Ernie Klein wrote:
[...]
> OK. I will offer this hypothetical, not exactly my daughters situation
> but close.
> (but I don't think enjoyment is taxable)
You'd be surprised.
> and we freely gave our labor,
> not for the landlady's enrichment but for my daughters (and grandkids)
> enjoyment.
>
Meant to say, that was a gift from you to your daughter. She in turn
used the value of the gift to pay her rent. (I assume there were no
strings attached, in other words she could have chosen to sell her
now-advantageous fixed-price lease to a third party).
No different than if you had given her a check for X thousand dollars,
and she decided to use it to pay the rent, while at the same time asking
her landlord to install or upgrade some amenities to support the current
fair market value of her monthly rental charge.
Or, maybe she is a highly valued tenant who always pays on time and
takes excellent care of the unit, and thus she deserves a break on her
rent to reflect the reduction in risk to the landlord from having her as
a tenant.
-Mark Bole
--
<< ------------------------------------------------------- >>
<< 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 (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by Ernie Klein on April 18, 2008, 12:52 am
Please log in for more thread options
> Ernie Klein wrote:
> > and we freely gave our labor,
> > not for the landlady's enrichment but for my daughters (and grandkids)
> > enjoyment.
> >
>
> Meant to say, that was a gift from you to your daughter. She in turn
> used the value of the gift to pay her rent.
No. You misunderstood, (or more likely I didn't make myself clear), my
daughter _spent_ her own money for materials which the landlady _payed
back_ by forgiving rent, a 1 for 1 exchange. If any gift was made, to
was to the landlady for the labor that she was never charged for.
> (I assume there were no
> strings attached, in other words she could have chosen to sell her
> now-advantageous fixed-price lease to a third party).
>
I will add, that there were indeed strings attached -- the landlady
agreed that she would not _increase_ my daughters rent for the next 5
years. However, in todays market, with housing prices falling and rents
falling in this area, there may be no value in that agreement at all.
> Or, maybe she is a highly valued tenant who always pays on time and
> takes excellent care of the unit, and thus she deserves a break on her
> rent to reflect the reduction in risk to the landlord from having her as
> a tenant.
Right on!
--
-Ernie-
--
<< ------------------------------------------------------- >>
<< 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 (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
| Similar Threads | Posted | | Re: Is Landlord Double Dipping? | April 16, 2008, 2:20 pm |
| Re: Is Landlord Double Dipping? | April 16, 2008, 7:33 pm |
| Re: Is Landlord Double Dipping? | April 17, 2008, 3:27 pm |
| Re: Is Landlord Double Dipping? | April 23, 2008, 8:11 pm |
| Re: Is Landlord Double Dipping? | April 23, 2008, 8:48 pm |
| Double entry and double taxation? | March 14, 2007, 12:03 am |
| landlord question - how to refigure schedule E for AMT? | March 20, 2008, 11:24 pm |
| Taxable SS double that of last year? | February 6, 2007, 10:36 pm |
| Avoiding Double Taxation | March 3, 2008, 12:06 pm |
|
|
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap