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i own a home in colorado that i was going to rent out this winter. since that decision my friends son was stricken with a rare bone cancer. she has no place to live while he undergoes treatment and attends school. finacially she is not in a position to rent her own place. someone told me that if i allow her to live in my home for a extened period of time and forego the rental income, by the way i use this home as my primary residency, there might be a way to set something up so i can tke the lost rental income as a tax deduction. or how can my friend set up a foundation so money donated to the foundation could be tax deductible to raisemoney for there living expenses without jepordizing their medicade status.

Submitted: 17 days and 12 hours ago.

Category: Tax

Value: $18

Status: CLOSED

State/Country relating to Question: Colorado

Already Tried:
your the first

Accepted Answer

Hi XXXXXX

Thank you for using justanswer. Unfortunately, there is no provision in the tax code to allow "unpaid rent" as a legitimate deduction on your tax return.

You would have to be able to include rental income in order to be able to deduct any expenses (such as % of mortg interest, taxes, utilities, depreciation, etc) Please see below for more in depth information:

Topic 415, Renting Residential and Vacation Property (formerly Renting Vacation Property and Renting to Relatives).

Tax Topics - Topic 414 Rental Income and Expenses

I hope this helps.

Accepts:
Expert:	Anne
Pos. Feedback:	100.0 %
Answered:	11/4/2009

Master Tax Preparer

Enrolled Agent with 20 Years Experience specializing Individual and Small Businesses

17 days and 12 hours ago.

Reply

i don't think you aswered the question, how do i set up a charitible foundation that
would allow a tax deduction for those who donate without jepordizing their eligibility
for medicade. i guess what your also saying that i can't write off the offer of a place
to stay but i need to know what i need to do to be eligible for such a write off.

Posted by Anne 17 days and 11 hours ago.

Answer

IRS will not allow charitable or tax deductible contributions for private individuals.

The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings may inure to the benefit of any private shareholder or individual.

Since the sole purpose of this proposed foundation is for the benefit of one particular family rather than for public benefit, you would not be able to gain approval as a qualified organization, and therefore contributions made would not be deductible by the donors.

I know this was not the answer you were hoping for, but I hope it gives you some clarity on this subject.

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