Tax Law (Questions About Taxes)/Not for Profit Rental?


My wife and I purchased a Second home in another state in July of last year.  The mortgage and tax records are in our name.  Our son and his family live in the house full time.  We also lived in the house 45 days last year and so met the mortgage requirements for a Second home and IRS requirements for a personal home.

Our son provides the money for the mortgage, taxes, and home insurance.  They take care of all maintenance costs.  We are not making a profit and donít intend to.  Nor do we intend to declare any deductions other than mortgage interest and taxes.  Do we have to declare the money our son provides for mortgage, taxes, and home insurance as rental income on Form 1040?  Can we take the tax deductions for all of the mortgage interest and taxes on our return?

Thank you,

You may deduct the interest and taxes on a second home.

You may not, however, report this is as a rental in order to take a loss because it is rented to a family member for less than Fair Market value. This type of use as listed is considered personal use.

Tax Law (Questions About Taxes)

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Randall Klein, MBA, EA


I am an expert in personal and small business taxation, including Forms 1040, 1120, 1120S, 1065. I can answer any type of tax question except those that are requesting help in illegal tax evasion. Tax avoidance is legal, however. I do not do offshore trusts, or opt-out of the tax system type of queries.


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