If I charge my adult daughter rent to live at home, do I need to claim it as income on my taxes?

If I charge my adult daughter rent to live at home, do I need to claim it as income on my taxes?
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#1

My adult daughter has graduated from college and just started working full time but still lives at home. She is 22. She files her own taxes. Can I charge her rent? If I charge her rent, do I claim this money as income on my taxes?


#2

You can charge her rent, and you will have to claim that rent as income.
Craig W. Smalley, E.A.
Admitted to Practice Before the Internal Revenue Service


#3

You will have to recognize your daughter’s rent as rental income.
However, if you charge her a lower than normal rent because she is your daughter (also known as unreasonable rent), you may run into gift tax implications. The IRS and Tax Courts have taken the position that unreasonable rent to related parties, defined as spouse, sibling, ancestor, or lineal descendent, can constitute a gift, and may be subject to gift tax rules.
If you’re not sure how to proceed, you should see a financial planner or tax professional in your area.


#4

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