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Life After Brown
Advice Needed
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<blockquote data-quote="UpstateNYUPSer(Ret)" data-source="post: 933727" data-attributes="member: 12570"><p>I guess I am not explaining myself very well. This would not be a loan. This would not be a gift. I would simply be using the proceeds from the sale of my condo to prepay my rent at my daughter and son-in-law's townhouse. I expect to net $90K when I do sell this place. At $1K/month I would be prepaying 90 months, or 7.5 years, of rent. I would be receiving a benefit (no rent payment) in exchange for my payment. They would be receiving a benefit (reduced mortgage) in exchange for my payment. Ours would be much like any other landlord/tenant relationship except that I would offer to babysit the grandkids so that they could have a date night.</p><p></p><p>I did read this morning on the IRS website that landlords who receive advance rent must consider that as income received in that year and would have to pay taxes on that income. My thought to get around this would be that they would not consider the townhouse to be a rental property for the period of time that I would be living there. The downside to this is that they would not be able to write off their mortgage interest as it would be a second home rather than a rental property. As you can see I still have a lot of research to do on this.</p><p></p><p>If this were indeed a gift then you would be absolutely correct. If it turns out that my idea is not feasible then I would most likely use the proceeds from the sale of my condo to help out both kids.</p></blockquote><p></p>
[QUOTE="UpstateNYUPSer(Ret), post: 933727, member: 12570"] I guess I am not explaining myself very well. This would not be a loan. This would not be a gift. I would simply be using the proceeds from the sale of my condo to prepay my rent at my daughter and son-in-law's townhouse. I expect to net $90K when I do sell this place. At $1K/month I would be prepaying 90 months, or 7.5 years, of rent. I would be receiving a benefit (no rent payment) in exchange for my payment. They would be receiving a benefit (reduced mortgage) in exchange for my payment. Ours would be much like any other landlord/tenant relationship except that I would offer to babysit the grandkids so that they could have a date night. I did read this morning on the IRS website that landlords who receive advance rent must consider that as income received in that year and would have to pay taxes on that income. My thought to get around this would be that they would not consider the townhouse to be a rental property for the period of time that I would be living there. The downside to this is that they would not be able to write off their mortgage interest as it would be a second home rather than a rental property. As you can see I still have a lot of research to do on this. If this were indeed a gift then you would be absolutely correct. If it turns out that my idea is not feasible then I would most likely use the proceeds from the sale of my condo to help out both kids. [/QUOTE]
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