Renting home to parent at low cost

[Vannak Kann]

Hi All,

I recently purchase an investment property, but i rent it to my parent at lower price, not at a market rent value. My question is:

1. Can i file my tax under a rental property, the reason is that i want to deduct the $ i spend on fixing the property.
2. I was told by a friend that i can't because if i do, then my mom has to file a tax return because she is getting income by not paying full rent price. (She's on disability at the moment, her income is not taxable)
3. I already file this year tax and file this property as a personal property.
4. Which way is a better way to file the tax, as a rental property or as personal property. i know that i get tax break on the loan interest if i file under personal property. Has anyone ever face with this issue before?.

thanks in advance

[Account Closed]

Here's some guidance on less than market value rent.

http://www.irs.gov/taxtopics/tc415.html

Specifically... "A day of personal use of a dwelling unit is any day that it is used by:

• You or any other person who has an interest in it, unless you rent your interest to another owner as his or her main home under a shared equity financing agreement
• A member of your family or of a family of any other person who has an interest in it, unless the family member uses it as his or her main home and pays a fair rental price
• Anyone under an agreement that lets you use some other dwelling unit
• Anyone at less than fair rental price"