Legal / possible to shift rental income to another person via a lease to said person + said person subleasing units?

[Stephen Chan]

Hi everyone!

I have an odd ball situation / question about if a particular method to minimize my tax liabilities on the rental income from a multi-family home purchase is legal, as follows:

Assumption: The 2nd party is pretty much at the bottom tier of the income bracket, while I'm at a much higher rate.

1. I purchase a multi-family home.
2. I lease all of the units in the home to a 2nd party, at free / near-free rates
3. Set up the 2nd party to sublease / re-lease out the units
4. New renters would pay the 2nd party directly, into a separate account dedicated for just this.
5. 2nd party will pay the income taxes. IRS is happy (?)

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In short, I'm hoping to "shift" the reportable income over to a 2nd party. (They're someone I trust - not worried about the money aspect.) Would this be a legal / allowed method to minimize taxes, as long as taxes are indeed being paid?

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I'm open to suggestions / criticisms / feedback - thanks all!