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Housesitting Taxable?
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tb
Jan 25, 2015, 12:40:04 PM1/25/15
to
Hi. I am not a tax professional, so please excuse me if what I am
asking is some sort of silly question...
Say that I accept to housesit somebody's property (house, pets, etc.)
while they are on an extended vacation. I would live there rent- and
utilities-free. No salary.
Would the IRS tax me for this?
Say that I also ask for free food and gas. Would things change with the
IRS?
--
tb
--
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asking is some sort of silly question...
Say that I accept to housesit somebody's property (house, pets, etc.)
while they are on an extended vacation. I would live there rent- and
utilities-free. No salary.
Would the IRS tax me for this?
Say that I also ask for free food and gas. Would things change with the
IRS?
--
tb
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>
Mark Bole
Jan 25, 2015, 3:15:04 PM1/25/15
to
On 2015-01-25 09:38, tb wrote:
> Hi. I am not a tax professional, so please excuse me if what I am
> asking is some sort of silly question...
>
> Say that I accept to housesit somebody's property (house, pets, etc.)
> while they are on an extended vacation. I would live there rent- and
> utilities-free. No salary.
>
> Would the IRS tax me for this?
>
> Say that I also ask for free food and gas. Would things change with the
> IRS?
Below is what Pub 525 says, which is the closest to a firm answer you
> Hi. I am not a tax professional, so please excuse me if what I am
> asking is some sort of silly question...
>
> Say that I accept to housesit somebody's property (house, pets, etc.)
> while they are on an extended vacation. I would live there rent- and
> utilities-free. No salary.
>
> Would the IRS tax me for this?
>
> Say that I also ask for free food and gas. Would things change with the
> IRS?
are going to get. Various facts and circumstances would need to be
known, and ultimately, if challenged by the IRS, the dispute could be
resolved in court.
For example, if I were in a position to render a decision, I'd want to
know the length of the stay, fair rental value (FRV) of the property,
your relation to the owners, your obligation or liability to the owners
for the condition of their property while they are gone, etc.
As for your second question, how are the owners going to provide you
with "free food and gas" if they are not physically present? Wouldn't
they have to give you money (or equivalent) instead, which you would be
free to use for any purpose, not just food or gas?
Pub 525:
"Bartering is an exchange of property or services.
You must include in your income, at the
time received, the fair market value of property
or services you receive in bartering. If you exchange
services with another person and you
both have agreed ahead of time on the value of
the services, that value will be accepted as fair
market value unless the value can be shown to
be otherwise. [...]
"Example 4. You own a small apartment
building. In return for 6 months rent-free use of
an apartment, an artist gives you a work of art
she created. You must report as rental income
on Schedule E (Form 1040) the fair market
value of the artwork, and the artist must report
as income on Schedule C or Schedule C-EZ (Form 1040)
the fair rental value of the apartment."
--
Mark Bole, EA
http://markboletax.com
Barry Margolin
Jan 25, 2015, 3:40:03 PM1/25/15
to
In article <ma3ink$fn8$1...@dont-email.me>, Mark Bole <ma...@pacbell.net>
wrote:
> On 2015-01-25 09:38, tb wrote:
> > Hi. I am not a tax professional, so please excuse me if what I am
> > asking is some sort of silly question...
> >
> > Say that I accept to housesit somebody's property (house, pets, etc.)
> > while they are on an extended vacation. I would live there rent- and
> > utilities-free. No salary.
> >
> > Would the IRS tax me for this?
> >
> > Say that I also ask for free food and gas. Would things change with the
> > IRS?
>
> Below is what Pub 525 says, which is the closest to a firm answer you
> are going to get. Various facts and circumstances would need to be
> known, and ultimately, if challenged by the IRS, the dispute could be
> resolved in court.
>
> For example, if I were in a position to render a decision, I'd want to
> know the length of the stay, fair rental value (FRV) of the property,
> your relation to the owners, your obligation or liability to the owners
> for the condition of their property while they are gone, etc.
What is he giving them in exchange for the free rent? All he's doing is
living there. The example in the IRS reg involves giving the landlord
something of value instead of cash.
Is "house sitting" a service in and of itself? Are there professional
house sitters? You'd need to determine a typical rate they would be paid
for sitting a house of this type.
>
> As for your second question, how are the owners going to provide you
> with "free food and gas" if they are not physically present? Wouldn't
> they have to give you money (or equivalent) instead, which you would be
> free to use for any purpose, not just food or gas?
Most likely he would save his receipts, and they would reimburse him
after the fact.
>
> Pub 525:
>
> "Bartering is an exchange of property or services.
> You must include in your income, at the
> time received, the fair market value of property
> or services you receive in bartering. If you exchange
> services with another person and you
> both have agreed ahead of time on the value of
> the services, that value will be accepted as fair
> market value unless the value can be shown to
> be otherwise. [...]
>
> "Example 4. You own a small apartment
> building. In return for 6 months rent-free use of
> an apartment, an artist gives you a work of art
> she created. You must report as rental income
> on Schedule E (Form 1040) the fair market
> value of the artwork, and the artist must report
> as income on Schedule C or Schedule C-EZ (Form 1040)
> the fair rental value of the apartment."
>
>
> --
>
> Mark Bole, EA
> http://markboletax.com
--
Barry Margolin
Arlington, MA
wrote:
> On 2015-01-25 09:38, tb wrote:
> > Hi. I am not a tax professional, so please excuse me if what I am
> > asking is some sort of silly question...
> >
> > Say that I accept to housesit somebody's property (house, pets, etc.)
> > while they are on an extended vacation. I would live there rent- and
> > utilities-free. No salary.
> >
> > Would the IRS tax me for this?
> >
> > Say that I also ask for free food and gas. Would things change with the
> > IRS?
>
> Below is what Pub 525 says, which is the closest to a firm answer you
> are going to get. Various facts and circumstances would need to be
> known, and ultimately, if challenged by the IRS, the dispute could be
> resolved in court.
>
> For example, if I were in a position to render a decision, I'd want to
> know the length of the stay, fair rental value (FRV) of the property,
> your relation to the owners, your obligation or liability to the owners
> for the condition of their property while they are gone, etc.
living there. The example in the IRS reg involves giving the landlord
something of value instead of cash.
Is "house sitting" a service in and of itself? Are there professional
house sitters? You'd need to determine a typical rate they would be paid
for sitting a house of this type.
>
> As for your second question, how are the owners going to provide you
> with "free food and gas" if they are not physically present? Wouldn't
> they have to give you money (or equivalent) instead, which you would be
> free to use for any purpose, not just food or gas?
after the fact.
>
> Pub 525:
>
> "Bartering is an exchange of property or services.
> You must include in your income, at the
> time received, the fair market value of property
> or services you receive in bartering. If you exchange
> services with another person and you
> both have agreed ahead of time on the value of
> the services, that value will be accepted as fair
> market value unless the value can be shown to
> be otherwise. [...]
>
> "Example 4. You own a small apartment
> building. In return for 6 months rent-free use of
> an apartment, an artist gives you a work of art
> she created. You must report as rental income
> on Schedule E (Form 1040) the fair market
> value of the artwork, and the artist must report
> as income on Schedule C or Schedule C-EZ (Form 1040)
> the fair rental value of the apartment."
>
>
> --
>
> Mark Bole, EA
> http://markboletax.com
--
Arlington, MA
Mark Bole
Jan 25, 2015, 6:25:03 PM1/25/15
to
On 2015-01-25 12:36, Barry Margolin wrote:
> In article <ma3ink$fn8$1...@dont-email.me>, Mark Bole <ma...@pacbell.net>
> wrote:
>
[...]
> In article <ma3ink$fn8$1...@dont-email.me>, Mark Bole <ma...@pacbell.net>
> wrote:
>
>
> What is he giving them in exchange for the free rent? All he's doing is
> living there. The example in the IRS reg involves giving the landlord
> something of value instead of cash.
>
> Is "house sitting" a service in and of itself? Are there professional
> house sitters? You'd need to determine a typical rate they would be paid
> for sitting a house of this type.
Yes, and yes, of course. Why, there are even private security firms that
> What is he giving them in exchange for the free rent? All he's doing is
> living there. The example in the IRS reg involves giving the landlord
> something of value instead of cash.
>
> Is "house sitting" a service in and of itself? Are there professional
> house sitters? You'd need to determine a typical rate they would be paid
> for sitting a house of this type.
will patrol your residence during your absence for a fee. It wouldn't
surprise me at all if the homeowner's insurance has a clause or two
about leaving the property vacant for extended periods, which alone
would be a good reason for a homeowner to arrange for house-sitting.
He said there were pets to care for, too. There are professional
pet-sitters and kennels that provide this service for a fee.
It would be different if the owners simply gave him a key and said,
"feel free to drop in whenever you like for however long you like, or
not at all, we don't expect anything in return". That would be a gift.
But he said he would "accept to house-sit", which sounds like an
agreement to an exchange of value for service to me. And he is still
considering negotiating for an increase in his "fee" by asking for
additional reimbursement of personal (non-deductible) expenses. Since
he would probably not have all the rights and privileges of a full-time
tenant, maybe the value received would be something less than the FRV.
But with the limited facts we've been given, I can't see under what part
of "specifically excluded from gross income" this would fall, for either
party.
Stuart A. Bronstein
Jan 25, 2015, 7:20:04 PM1/25/15
to
tb <nos...@example.invalid> wrote:
> Say that I accept to housesit somebody's property (house, pets,
> etc.) while they are on an extended vacation. I would live
> there rent- and utilities-free. No salary.
>
> Would the IRS tax me for this?
Under section 119 of the Internal Revenue Code, meals and lodging
> Say that I accept to housesit somebody's property (house, pets,
> etc.) while they are on an extended vacation. I would live
> there rent- and utilities-free. No salary.
>
> Would the IRS tax me for this?
given to employees may be excluded from taxable income if the meals
or lodging is given for the convenience of the employer, and on the
employer's business premises.
That provision appears to only actual employees. You would probably
be considered a contractor, and the provision would not apply.
> Say that I also ask for free food and gas. Would things change
> with the IRS?
--
http://DownToEarthLawyer.com
tb
Jan 25, 2015, 10:25:03 PM1/25/15
to
On 1/24/2015 at 10:13:56 PM Mark Bole wrote:
>
> As for your second question, how are the owners going to provide you
> with "free food and gas" if they are not physically present?
> Wouldn't they have to give you money (or equivalent) instead, which
> you would be free to use for any purpose, not just food or gas?
>
I would keep the receipts for food and gas and then present them for
>
> As for your second question, how are the owners going to provide you
> with "free food and gas" if they are not physically present?
> Wouldn't they have to give you money (or equivalent) instead, which
> you would be free to use for any purpose, not just food or gas?
>
reimbursement when the owner of the house comes back...
--
tb
Arthur Rubin
Feb 12, 2015, 9:10:04 PM2/12/15
to
On Sunday, January 25, 2015 at 4:20:04 PM UTC-8, Stuart A. Bronstein wrote:
> tb <nos...@example.invalid> wrote:
>
> > Say that I accept to housesit somebody's property (house, pets,
> > etc.) while they are on an extended vacation. I would live
> > there rent- and utilities-free. No salary.
> >
> > Would the IRS tax me for this?
>
> Under section 119 of the Internal Revenue Code, meals and lodging
> given to employees may be excluded from taxable income if the meals
> or lodging is given for the convenience of the employer, and on the
> employer's business premises.
Sorry about the delay; I'm just getting back to checking this group. It looks
> tb <nos...@example.invalid> wrote:
>
> > Say that I accept to housesit somebody's property (house, pets,
> > etc.) while they are on an extended vacation. I would live
> > there rent- and utilities-free. No salary.
> >
> > Would the IRS tax me for this?
>
> Under section 119 of the Internal Revenue Code, meals and lodging
> given to employees may be excluded from taxable income if the meals
> or lodging is given for the convenience of the employer, and on the
> employer's business premises.
to me that a house-sitter would be a "household employee", not an
"independent contractor". Having hired an household employee in California,
not specifically working as a tax professional, I am familiar with the
requirements there. There would be no reporting requirement in California
unless total cash paid to all "employees" exceeds $750 in a quarter, and no
Federal reporting requirement unless gross income (not including the value of
rent required as a condition of "employment", or meals, up to a statutory meal
allowance) exceeds $1000 (for all "employees") in a quarter or $1900 (for a
single employee) in a calendar year. (I cannot find in the publications
whether the "rent" not subject to income tax, would be subject to Social
Security tax. It was in prior-years versions of IRS publication 15-B.
If state filing is required, it _would_ be subject to state employment taxes.)
It doesn't appear that there would be a problem for the original poster, in any
case, even if the homeowner was required to file, and didn't. If you received
gas money, that would be taxable, though.
--
Arthur Rubin
CRTP in Brea, CA
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