Publication 15, Employer's Tax Guide, says only this much:...Payments for the services of a child under age 18 who works for their parent in a trade or business aren't subject to social security andMedicare taxes...No definition, and IRS publications are not really law anyway.

Assuming the area checks out, I’d rather buy in a high price area that has little to no cash flow rather than an area that has cash flow but lower price.  

Simply gifting him half the property now wouldn’t immediately allow him to claim the exclusion without fulfilling this residency requirement, I don't believe.One thought would be to use a HELOC to pull just enough equity out of the current home and use it to buy a smaller home, or at least the down payment.

Our lot is fenced in and we cannot see where he lives but close enough to be of concern, but we want to stay in the same town until the kids are finished school.So, my question is this, would it make sense to rent our home (roughly $2300-2500/mo. as per real-estate agent claims), with the stipulation that the garage is used for my business AND buy a home nearby?

A month post closing, the son of the buyer (mother) has written a "legal" request to have us buy him a new refrigerator.  

Investment Info:Single-family residence buy & hold investment.

I originally wanted to buy into a vacation rental market but this last year has been crazy and we seemed to have been priced out.  

Who's gonna buy them?

Unless you've done substantial improvements to the building or used a large down payment when buying, it's unlikely this will work.Perhaps your best move is to find a new primary residence that is 2-4 units and repeat the process.

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