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    jkgerock's Avatar
    jkgerock Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Dec 30, 2008, 12:29 PM
    Write-off expenses for parent, dependent parent.
    Hi, I have seen questions similar to the one I am about to ask, but nobody seems to be in the same situation.

    My brother (27) and I (23) purchased a house for our mother to live in so that she can save money. She only makes about $12,000/yr.

    We would like to be able to get some sort of tax break for this expense (write off lost rental income, or claim our mother as a dependent), but I cannot seem to find any tax rules related to this situation. She exceeds the income limit to be claimed as a dependent, but my brother and I cover more than 60% of her yearly expenses (housing, car payment, car insurance, car/house maintenance, and more).

    I would appriciate any help that could help me save money for being such a good son.:)

    Thank you,

    Jace
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Dec 30, 2008, 01:16 PM
    Jace:

    The IRS takes a special interest in business conducted between relatives and makes sure that losses in such business relationships are legitimate. If you do not treat your mother like a stranger, have her sign a lease and collect rent, you CANNOT legally deduct the rental loss.

    Given the ages you quoted for yourself and your brother, I assume that your mother is in her late 50s/early 60s and is NOT on Social Security. However, if she is earning only $12,000 a year, she is making less than minimum wage if she is working full time. What exactly does she do to earn such a pitiful wage?

    If you email me at [email protected] with more details, perhaps I can give a more insightful analysis.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #3

    Dec 31, 2008, 05:56 AM
    Quote Originally Posted by jkgerock View Post
    Hi, I have seen questions similar to the one I am about to ask, but nobody seems to be in the same situation.

    My brother (27) and I (23) purchased a house for our mother to live in so that she can save money. She only makes about $12,000/yr.....

    I would appriciate any help that could help me save money for being such a good son.:)

    Thank you,
    Jace
    You mother can not be your dependent as her income is more than $3,500. You can not take any deduction for lost rent or other expenses.
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