Jill O

Thanks Judy. I appreciate your help with this.

Once a child turns 18 can a parent turn over the dependency exemption to his ex using the 8332? The child is a full time student. The parent can't benefit from the American Opportunity Credit but the Ex could. I believe the answer is NO but I'm not 100% sure.

I appreciate all the input from everyone on this board. I am not a CPA or an EA and only do a small number of tax returns each year, all 1040. You can't get anyone on the phone at the IRS and even if you do get someone on the phone all they do is quote the publication which is vague at best. The law is complicated and not clear and I just want to get it right. Your advice has been very helpful. Thank you.

So no profit motive, no income? Or no profit motive line 21 on the 1040? What she is paying is well below market rate.

You all really have me confused now. Are you suggesting that "living together" has no tax implications? If you are married it is clear that it is not a rental situation. If you are not married and the taxpayer owns the home it seems to me this is a rental situation (and I think the IRS agrees). I appreciate all your input on the question of whether this is a rental situation, but... No one has answered my real question here which is how do I fill in box 2A! Or do I not fill it in at all? And by the way, I'm not trying to show a loss, I'm looking to claim the income and write off as much as (legally) possible to the extent of the rent (thus, vacation home rules!). If I was doing this return by hand I wouldn't have this question because I kind of know what the numbers should be, but the ATX software calculates using those Personal/Fair Rental numbers (and if I don't put them in I get an error message) as well as the number entered for "Rental Use percentage for property used partially for personal use only" . As ATX Gurus, would you help me figure out the software issue and not so much the tax issue. But I am also now curious, are some of you suggesting he doesn't need to claim the money as rent? She is writing him a check every month.... I appreciate your input...

He figured out what the expenses of the house were for the year (property taxes, insurance, utilities, household supplies) and came up with a dollar figure and divided it by 2. They are "living together". I told him he could make this all much simpler for me by getting married but he did not like that idea....

They are sharing the whole house

I am using the ATX 1040 package. The guy and his girlfriend are the only 2 people in the household. From my understanding, the IRS considers any payment to the homeowner rent regardless of their interpersonal situation. They are "sharing expenses" -- that is, half the utilities, property taxes and other household expenses. The house is paid for. Even if she is only paying for utilities I believe the IRS considers that "rent". I understand all the allocation of expenses, however I'm not clear on whether I enter all the expenses for the year and let the program allocate them or enter the expenses for the time frame she lived there. Can someone explain line 2A? Can it be 122 Rental and 366 personal? The program calculates differently depending on how I enter it. Also, I'm wondering about the "Rental Use percentage for property used partially for personal use only" -- in this situation do I enter 50%? I assume most of the people on this board are using ATX? I appreciate any help you can offer.

I am filling out Schedule E for a client whose girlfriend moved into his house in September (He lived in the home all year and owns it). I am struggling to figure out how to fill out the boxes 2A for Fair Rental Use Days and Personal Use Days. I understand the "Vacation Home" rules apply. My first thought was 122 days for Fair Rental Use and 366 for Personal Use Or should it be 122 days for Fair Rental Use and 122 days for Personal Use because he only started "renting" his house on 9/1/16? Or should the Fair Use + Personal Use=366? (in which case how do I allocate the days?) Can anyone help? He says they share the space 50/50