Can I claim my dad's property income on my tax return?

5 Replies

My dad just purchased a 2 unit property and everything (mortgage, deed) is under his name. He is letting me completely handle the management of the property, finding tenants, collecting rents, etc.

My question is can I claim the rental income on my tax return even though I do not own the property? I currently do not have a W-2 job so I would like to report this as income in order to qualify for a loan later on. 

I don't think so. I think he would need to pay you for your services and give you a 1099 or W-2 for you to claim income. Talk to a CPA to know for sure the best way to handle it. Good luck!

If he is allowing you to essentially have exclusive control, liability and benefits maybe he should just deed you the property. Otherwise, you might consider setting up a management agreement between you and him (watch any state licensing requirements) and have him pay you a fee that can equal anywhere from 6 to 100% of the income. Then you can just record that as your ordinary income. Be sure to consult with your tax professional on that one. Good luck.

What is being done with the profits?  If you get them and are responsible for the risks, then you should be added to the title and mortgage.  At that point you should have no issues putting it on your tax return, just make sure your dad is not putting it on his.

If you are getting a flat rate or percentage of the profits, you should get a 1099 for the income from your dad.

If the property has a paper loss it may be best for it to be on your dad's income taxes since he would seem to get more advantage from it, especially if he is paying you a reasonable amount for property management.

Have him lease the property to you and assign any existing lease rights to you for $1/yr.    You'd then be sub-letting the space, and could claim rental income.

No you cannot do that. I assume you are simply doing the work correct?

Unless you are actually keeping the income yourself you cannot do that. 

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