Deducting the value of reduced rent for handyman

[Tyler Brown]

I have a two family house, with one unit given a discounted rent that's about $300 month below market rate.  In exchange, the guy in this unit acts a caretaker and general handyman for the property, and does tasks like lawn care, snow removal, and basic repair work.

Am I able to deduct this $300 from my taxes as a business expense?  My understanding is that if I charged him full rent, and simply paid him $300 every month for his services, that would be deductible, and at the end of the day, this works out to basically the same thing.

[Lance Lvovsky]

You answered your own question. The alternative arrangement would be him paying you an additional $300 and you turning around and paying him $300/month for his services. Technically speaking, you are charging him reduced rent in exchange for his services. His services constitute income to you - in this case $300. So you would include the $300 as income but then just deduct it thereafter. You get to the same place.