Harlan Lunsford wrote:
- quote -

Y'all Southerners are crackin' me up! Speaking of the
south, has the moderator moved to Australia yet?

-Mark Bole
(Midwest transplant to West Coast)

Moderator:
I am still working on it.

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Paul Thomas wrote:
- quote -

LOL! I substituted "bacon" for "eggs", mostly because of
the saying "bringing home the bacon". However my
grandparents did used to accept eggs, chickens, bacon at
their country store. sigh....

Merry Christmas, Paul, from Southwest Georgia.

Santa ChEAr$,
Harlan Lunsford, EA n LA

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Stuart A. Bronstein wrote:
- quote -

Yep! (grin

Anyway, let's get a tad more technical here. The referrer
(tenant getting the free rent) reports the income even
without a 1099 but since this is not a trade or business,
pays no SE tax on it.

Santa ChEAr$,
Harlan Lunsford, EA n LA

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Stuart A. Bronstein wrote:
- quote -

Since one is either a (common law) employee OR independent
contractor, I would say it would not be a factor in case of
the plumber. Each would have income with corresponding
deduction. And best to account for it.

Santa ChEAr$,
Harlan Lunsford, EA n LA

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Stuart A. Bronstein wrote:
- quote -

Too loose, I think <G> . Sec. 119 refers ONLY to
employer/employee relationships. I don't see any way you
could argue that the tenant is the landlord's employee in
this situation. Will he get a W-2? I don't think so.

I think it's taxable "other income." He's not an
independent contractor either, in the sense of having a
business of referring tenants to his landlord. It's just an
item of incidental income. I also think it wouldn't occur
to many people to tell their tax preparer about it unless
the landlord gave them a 1099.

Katie in San Diego

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"Katie" <katiej_1958[at]yahoo.com> wrote:
- quote -

Well, the landlord wants new tenants. A current tenant finds
new tenants and gets compensated for that. More independent
contractor than employee, of course, but I was using the term
loosely.

Stu

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Dick Adams wrote:
- quote -

hmm good idea! hah sure there's some section regarding this
situation

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Harlan Lunsford <hnslunsford[at]bellsouth.net> wrote:
- quote -

Well, if you take the word "employee" literally as a legal
employee as opposed to an independent contractor I'd have to
agree with you. But is that necessarily the case?

Let's say a landlord gives a plumber free rent in exchange
for living on the premises, being available after hours and
giving a certain amount of plumbing services. The plumber
is clearly an independent contractor. But would §119 apply?

Stu

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"Harlan Lunsford" <hnslunsford[at]bellsouth.net> wrote

- quote -

Dang it all!!!

I was counting on the "Free Bacon" lure to attract new
clients. I mean, who isn't moved by the slogan "Git'er
done for Bacon" and *not* come in for tax preparation?

Now I have to asterisk it with "*subject to applicable
taxes".

--
Paul A. Thomas, CPA
Athens, Georgia

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Stuart A. Bronstein wrote:
- quote -

??? How does the landlord get to be the tenant's employer?

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Stuart A. Bronstein wrote:
- quote -

Aww now, Stu. He didn't say he was an employee of the
apartment owner; only that he had referred new renters to
the landlord. Hence sec 119 doesn't apply.

Holiday ChEAr$,
Harlan Lunsford, EA n LA

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Stuart A. Bronstein wrote:
- quote -

It's earned income, but he did not receive it. So his
landlord says "pay less rent" and then expenses the amount?

It strikes me as double clutching by the landlord!
He reduces his income and then expenses the rebate.

Dick

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Uri wrote:

- quote -

Nope. You would have nothing had you not made the
referral, so anything you get, whether money, bacon, or
rental reduction, is income.

Happy Holiday ChEAr$,
Harlan Lunsford, EA n LA

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Uri wrote:

- quote -

The code views this as you doing work for something, and the
value of that something being taxable.

Unless, of course, there's something else in the code that
says otherwise for this specific situation. I doubt it, but
I could always be wrong.

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"Uri" <balor123[at]gmail.com> wrote:

- quote -

It's not really a tax free rebate because you perform
services in exchange for compensation.

But if you have to live in the complex to get the referral
bonus, it seems to me that you should not be taxed on it.
To me it looks like section 119 lodging furnished for the
convenience of the employer. And for that it would not be
taxable.

Stu

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I referred some people to my apartment complex and they gave
me a referral bonus for it. They did not mail me a check,
though. They just told me to pay less on my rent. They are
claiming that the bonus is taxable income. Are they
correct? Does this qualify as a rebate, which isn't taxable
since they are discounting my rent?

Thanks.

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