Staying with Family/Friends for Business Travel

Staying with Family and Friends

Staying with family and/or friends while on a business trip is allowed if you follow all three of these rules:

Rule 1: Family and friends may rent a room or entire house/apartment for no more than 14 days during a calendar year to earn the rent tax-free.

Rule 2:  Family and friends must personally live at the property being rented for more than 14 days.

Rule 3: You must pay a fair market rental rate.

If you pay your family and/or friends more than $600 during a calendar year, you must report the total of the business rents to the IRS. In turn, your family/friends will report this income on their tax return on Schedule E and report this income in the expense section on Schedule E as well with a supporting statement.

Because you take the business deduction for your travel, your family/friends should also charge sales and/or occupancy taxes. Paying these taxes adds proof of the room’s rental.

If you would like to learn more about renting from family/friends, please call Susan at 630.523.5762. For more helpful tips on becoming a highly profitable business owner, check out Highpoint Advisory Services.

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