In a Pickle with my Mother!?

Question

The home I live in belongs to my mother. She does NOT have a mortgage, so the rent she receives is her's to do with what she wants. This situation has it's advantages & disadvantages... My mother has found that charging me rent & utilities of $1000 has thrown her into a higher tax bracket. She is in the process of receiving my late father's Social Security & will then stop taking a monthly draw on her investments. She also has a decent job. The next part is, she lives with her boyfriend & as far as I know the only bills she has is to buy the groceries. No car payment either. This has gone on for 2 yrs, and I could care less she does with her $. So, she tells me that she wants to help ME out financially, by lowering the rent, as I am about to have surgery which will leave me strapped for awhile. But then, she's afraid that she'll short change herself by doing so... She's asked me to help her sort this out. I have no idea what to do or to tell her! HELP!!

Real Estate guy - No, your answer right now is best by far! I am a woman, btw - why the silouette is male is beyond me. I don't want to take advantage of my mother, I was not raised that way. My dad would come back & haunt me! I do not mind paying her at all & I haven't asked her for a discount! I didn't know how to advise her about the income... if you are right about the family thing, then all the more better to her! I'll tell her what you had to say! Thank you so much!

Answer 1

Why is your mother claiming income from her son for living on her property? You can't claim it as expenses on your taxes because it is a residential lease not a business lease. The question of tax bracket increasing should never be affected by your mother because if you give your mother money each month it is no one's business but yours and hers. There is no disadvantages to her situation unless she rents it to someone else. I think the real question you are implying is how do I pay my mother less rent for her home and not look like a mooch since you don't think she really needs the money because she has a job and the house does not have a mortgage. If your mother owned a grocery store would you expect to shop for free if she paid cash for her stock and did not owe money to the venders? The original mortgage did not pay itself. When people get older one of the privileges of time is that some obligations are paid and cost of their living decreases because of it. Your mother should be taking the rent money and saving it for when she can no longer work so she won't have to depend on her son to support her. You honestly don't think anyone can live off of social security alone?
Heck, why don't you just ask your mom to give you the house so you don't have to wait to inherit it. I am sure you would be happy to take the burden off of her and hay she can use it as a tax write off if she sends you a 1099 for the value!
I know this is not what you wanted to hear and I am sure this will not get to be picked as your favorite answer but this is the best answer for your question.
Good luck and Happy New Year,

Michael

Answer 2

First of all, as long as your payments are covering the property taxes, homeowner's insurance and anything else she says it pays for, then you're good to go. Sit down with her and copies of her bills and start adding them up.

She should be able to write off depreciation on the house since it is officially an investment property...make sure her tax preparer is doing this!

Answer 3

Your Mom is a good person.

How does she think she will short change herself? If for tax purposes, see if she can invest in tax free municipal bonds, or "hide" money some other way.

I'm not exactly sure what you are asking.

Answer 4

Sounds like she needs a good CPA to help her structure her income.......