So…to facilitate the move of my in-laws up to East TN, we bought a house (had it built, actually) and now “rent” it to them. They are financially challenged, so what they pay us in rent is less than the actual mortgage payment.
In this first year of dealing with the tax implications of this, is it really considered “income” if I am not making any money? It doesn’t to me since if their rent payments to us are going to be taxed as income, I would be better off letting them live there for free.
Thoughts on this?