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Any problem with mother paying "rent" while living with us?


She pays me and I provide private bedroom, bathroom, kitchenette, all utilities, pay for food, laundry products. She pays for her own personal items.


We have a living arrangement that specified the $ amount and what's included and it's far below what she would pay to live anywhere else on her own.


Anything more we need to protect ourselves ? She's 91.

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Do you have a contract? Is that part of the “living arrangement”?
Are you reporting her payment as income to yourself?

The contract will keep her payment to you from being considered a gift. This matters should she need Medicaid in her future.
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Amelzer20 Jun 2023
We don't count it as income as there are expenses that are related to the $$. I'm not keeping any records though, maybe I better start.
We charge her 700 a month.
Thank you for your reply.
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Yes, a contract. Signed by you both and a notary. Maybe even have a lawyer draw it up. I very much feel that a parent should pay their way. My Mom still was paying for the upkeep of a house so I did not charge her rent. But she did pay for her Depends, special food and clothing. I wrote myself a check once a month. Put the receipts in an envelope and put the date and check# on the envelope. Medicaid did not question the amt taken out monthly.
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If it is rental it is income, and you have the IRS to answer to. This should be by contract also so that it can never look like gifting.

I would consult elder law attorney to write up simple contact and do know that calling this "Shared livings costs" is better tax wise in most cases than rental income.

I don't think this is wrong and in fact think it is CRUCIAL and think it should have within contract when living will be reassessed as to whether working for both parties or not.
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I would charge a nominal fee, for utilities and cable. If you supply food, I’d charge for that too. Costs are going up, if you can’t afford to do it for free then you need to charge for these outlays. If she’s with you for nine more years, it will add up.

Of course, you should have a contract in place.
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Ame, if your mother ever needs to apply for Medicaid, you will need to account that rent as something other than a gift to you each month.
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sounds like there are two components here: The "rent" which needs to be defined and reported as income, (although even there, as in all rentals, the income is not pure profit, there are deductions to that: pro rated costs to maintain that rental property, property tax, depreciation of asset, mortgage interest if any, ) but the other expenses like food, laundry products, utilities which are not income, they are real costs she is incurring. I am just guessing at least two or three hundred of that seven hundred is used for those things.

By the time all the above is considered, a I would be surprised if much real income is left, but the rent and deductions have to be reported. Where can you live with own room, kitchenette, food, etc for 700 bucks these days? Nor at that point would it be considered a gift.


As other have said, have an agreement written up to delineate these issues.

While it never hurts to have a lawyer do this, I will probably rankle some by suggesting you could do it on your own with the help of all the online resources there are now.
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Ame, what you describe is mom paying her share of costs. That is not income to you, it is her paying her living expenses.

Medicaid knows that we have to pay to live and they do not view living expenses as gifting.

If you do a contract, you just made yourself a landlord and not a roommate and that comes with consequences that your CPA can help you understand. I believe it will cost you money to do it this way and I would discourage you from going that route, as you are obviously not her landlord. But, speak with your CPA and get guidance from them.
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Karsten Jun 2023
I concur that in this case a CPA like IsthisReallyreal suggests is a better option than an elder lawyer.

I also agree that at the end of the day, however it is structured, there really will be little to no "profit" left
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