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I live rent-free in a house owned by my parents, am I subject to inputed income taxes?
Wednesday, March 31, 2010
Is living with your parent Inputed income?
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I live rent-free in a house owned by my parents, am I subject to inputed income taxes?
1 comment:
Dear Steve, thanks for posting on our blog.
Imputed income is defined as non-cash consumption benefit acquired either from owning durable property or from performing personal services. It consists in "rents and wages" that one implicitly "pays" oneself for use of one's own property and services. Imputed income is hard to determine because of absence of monetary exchange.
In your case, you can look at your living in your parents home from 2 different perspectives. One is that your parents are giving you a gift of Rent Free Living and second that you have imputed income. In the first case, you don't have to worry about the income or gift tax as it is not income to you and the payer is responsible to pay the gift tax. If you take the second option then you become liable for the tax.
I hope this will help.
Web Tax Office Team
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