- quote -

You can't assign income and not have to recognize the income
for tax purposes.

What he can do is to lend the property to his parents, in
which case they would become the beneficial owners and
entitled to the income. However the loan would be a taxable
gift, and to the extent the property has a value of over (I
think it's) $100,000, a gift tax return will be required.

Stu

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philmarti[at]aol.com (Phil Marti) wrote:

- quote -

"[W]e think that no distinction can be taken according to
the motives leading to the arrangement by which the fruits
are attributed to a different tree from that on which they
grew." Lucas v. Earl, 281 U.S. 111, 115 (1930).

Which is the beginning of the horticultural metaphor. But
the point is that the income from property is taxable to the
owner of the property.

If the property owner transfers the ownership of the
property to another person, then the transferee becomes the
owner of the rental income as well. But you can't
effectively assign the future rents and not also transfer
the ownership of the property itself.

*Dan Evans
*Author of the Tax Protester FAQ
*http://evans-legal.com/dan/tpfaq.html

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"Jess" <qmqm[at]she.com> wrote:

- quote -

Not a good plan. Your parents don't own the rental property
and could not, therefore, enjoy the tax use of the
depreciation related to it. You may be able to claim your
parents as dependents if you can pass all five of the
support tests. Parents don't have to live with you in order
to pass one of those five. Check out the others.

Wayne Brasch, CPA, M. S. Taxation

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- quote -

That was my initial reaction, but I wonder....

Why couldn't the property owner assign the future rent
payments to his parents? The gross rental payments would be
income to the parents, and they'd have no deductions against
it, but I can see that it would still be their income.

The property owner would lose all deductions except real
estate taxes.

Phil Marti
Topeka, KS

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qmqm[at]she.com (Jess) wrote:

- quote -

No. It's your money and you are the one who should pay the
taxes on it.

There may be a way for you to transfer before-tax money to
your parents, but this is not it. Talk to your lawyer and
tax professional about your precise circumstances to
determine what your options are.

Stu

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"Jess" <qmqm[at]she.com> wrote

- quote -

The IRS will see right through this and tax it according
to what it is.

And it's income to you.


--
Paul A. Thomas, CPA
taxman at negia.net

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I am trying to figure out a proper way to do this.
I have rental income of $750/month
If I am also supporting my parents with $750/month

Is it ok to have my tenant write a check to my parents
directly ? In this way, they are the one receiving the
rental income, and it will be taxed at a lower rate. Any
thoughts or advices?

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