employer/lodging

[TAXMAN]

Landscaper (sch C) provides housing for 2 employees(not on his property but in a different town 20 miles away) .

Employees sometimes keeps business trucks at this location in order to be on job sites early or have to repair them.

Question now is what do we do with this so called rent not being paid or FMV of housing not showing up on W-2? Landscaper is not showing rent on tax return. Mortgage co saying W-2 not high enough or this number not showing up in other box, or Employee pays no rent.

Employees pay all utilities at this location. I think if we treat this as other income on return and pay the SS/MT employee may be ok. I think employer may have a real problem if he tries to deduct this as other iexpense. I still think employer may be withholding rent amount and then calculating tax. Can't be sure as employer doesn't appear to be doing this on the paystubs. May be employer is holding off hours to compensate for the rent and then paying employees.

Any thoughts on how to handle W-2 or fix employees tax return. I may be asked to prepare W-2's for company and want no rats in the woodpile.

Thanks for any imput.

[jainen]

>>May be employer is holding off hours to compensate for the rent<<

If so, you have a conflict of interest that should prevent you from doing tax work for the company at the same time as for the employee. Besides the rent that is apparently a taxable fringe benefit, the value of the personal use of company vehicles (i.e., commute) should also be on the W-2. How to handle this situation depends on which taxpayer is your client.

[TAXMAN]

I found out that employer is withholding hours to make up rent#'s. So if TP reports on line other income and pays SS/MT on the amount he would be clear. Sounds to me like bartering. Any additional thoughts please. Thanks