Client rents a small apartment to a child for much less than FMV. I understand that below FMV rent creates a Personal Use Days situation so none of the days are Fair Rental Days and expenses can't be deducted.....the client doesn't itemize either so no mortgage interest or real estate taxes are used.
However from my research the rental income should/needs to be claimed. Crappy situation when many of these situations are just cost sharing arrangements with no profit motive whatsoever.
Any other research that would prevent claiming income (with no expenses) under a cost sharing arrangement?
Thanks for any help!