fair rental value of home

[Rsundbo]

For tax purposes I need to know the fair rental value of the home I live in. Where can I get that information that will be honored by the IRS.

[Dan Auito]

I'll call you RS for short. (Welcome):SM082: O.K. 1st off you'll probably never need to prove it to our rich uncle but in the case that you do.

Gather up the Sunday real estate classifieds and start highlighting homes for rent that are similar to yours, say you find four. Add their asking rent amounts together and divide by four to find the average rent $$$ being charged.

This would be VERY acceptable to the tax man should he come a calling. (Put the newspaper in your file, It's dated)

You can also ask a couple of your local real estate offices for a list of currently available rentals to re-enforce your case.

Don't fear Uncle Sam, the insiders rule is that if they the I.R.S. can't with reasonable assurance collect at-least $5,000 from you as a result of thier doing the full fledged audit, they WON'T bother. The philosophy is there are bigger fish to fry!

[Just Information]

This site may be of some help

http://www.huduser.org/datasets/fmr/fmrs/select_Geography.odb

[Aldo]

Just do as Dan suggested. Check market rents in your immediate area within, maybe, a 1/2 mile radius (more if you are in a sparsely populated area). If you miss the mark by twenty bucks or so, the IRS won't even look at your tax return, much less review it.

[Just Information]

You will not normally have to worry unless you are classified by the IRS as a dealer/real estate professional. Once classified you are red flagged.

Fair Rental Value The amount the owner of property could reasonably expect to receive from a stranger for the same type of lodging; generally, the amount at which a home with its furnishings could be rented to a similar size family in a similar location.

The general standards acceptable by IRS has been HUD standards and can outweigh newspaper adds unless you seek out a local section 8 office to provide creditability to the for rent adds.

Keep in mind that location, area, zip and income ratios can affect greatly.

Also, see for some info on this subject:

http://www.unclefed.com

http://www.irs.gov/taxtopics/tc415.html

http://www.realestatejournal.com/buysell/taxesandinsurance/20060314-kim1.html

Some case law on this issue:

http://www.ssa.gov/OP_Home/rulings/ssi/03/SSR81-23-ssi-03.html

http://www.clergysupport.com/docs/newsletters/09_02_CHA.pdf