Taxes and Paying Rent to a family member

[Stiganator]

So I live with my brother while I'm going to college, but I pay him $500 a month. At an official apartment, I recall getting a 19% of total rent refunded for property taxes????. What would we have to do to get that same sort of deal? Or does it not work the same way?


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Please post tax questions in the tax thread. Thanks.
AnandTech Moderator Evadman

 

[Ns1]

uh what do you mean "at an official apartment"?


better yet, what state

MN?

 

[Perknose]

Originally posted by: Stiganator
So I live with my brother while I'm going to college, but I pay him $500 a month. At an official apartment, I recall getting a 19% of total rent refunded for property taxes????. What would we have to do to get that same sort of deal? Or does it not work the same way?

Just get your brother to give you a prorated share of his property tax rent refund when he gets it.

 

[Stiganator]

Yeah, In Minnesota.

When I lived in an apartment on campus, they gave us a minnesota property tax renter's refund form. That form basically said if you're an independent you get 19% of your total rent paid back.

Just wondering how I can swing that now. It's a decent additional refund, about ~$900 if your rent is $500/month.

Add that to the $1200 federal return and $300 state return plus the $600 2008 preemptive return and your sitting pretty at $3,000.

 

[Gooberlx2]

Do you share an apt or live in his house? If he's not claiming your rent as income, you might not be able to claim the deduction (without screwing one or both of you over if audited)....I could be totally off base with that though.

Anyway, is your current living situation better than or equal to a 19% discount versus renting on your own?

edit:
I assume this is the form? There's a line in there for Property ID, which I can only guess they check against some sort of database. He certainly wouldn't be able to give you a valid Certificate of Rent Paid (CRP) if he's not in the renting "business".

 

[Ns1]

Originally posted by: Stiganator
Yeah, In Minnesota.

When I lived in an apartment on campus, they gave us a minnesota property tax renter's refund form. That form basically said if you're an independent you get 19% of your total rent paid back.

Just wondering how I can swing that now. It's a decent additional refund, about ~$900 if your rent is $500/month.

Add that to the $1200 federal return and $300 state return plus the $600 2008 preemptive return and your sitting pretty at $3,000.

Ah I see. odds are you're doing it off the books, so easiest way is gonna be as perknose says.

How to apply
Your landlord is required to give you a completed Form CRP, Certificate of Rent Paid, no later than January 31 of the following year. You will need this CRP when you apply for a property tax refund. To apply, complete Form M1PR. You will also need the M1PR instruction booklet.

Doubt your brother is going to give you a CRP. Odds are he's gonna get a CRP from the landlord, at which point he'll need to apply.

http://www.taxes.state.mn.us/p..._refund.shtml#P53_3157

*I know nothing of MN law except what I read on that page.
**It would be hilarious if I put a Circular 230 disclosure at the end of my posts.

 

[MikeyIs4Dcats]

why would you get property taxes back as a renter? You do not own nor do you pay the property taxes.

 

[Gooberlx2]

Originally posted by: MikeyIs4Dcats
why would you get property taxes back as a renter? You do not own nor do you pay the property taxes.

Apparently Minnesotans get refunds on rent....lucky bastards.

 

[iamwiz82]

Originally posted by: Gooberlx2

Originally posted by: MikeyIs4Dcats
why would you get property taxes back as a renter? You do not own nor do you pay the property taxes.

Apparently Minnesotans get refunds on rent....lucky bastards.

It's call the Homestead Property Credit here in Michigan. Renters get a portion of their rent back, homeowners get taxes back.

I would imagine that if you were to claim that, your brother would get busted for not claiming the income from the rent he accepted from you.

 

[imported_Baloo]

It's not like your brother can't evict you on short notice. Go ahead, try to claim 19% credit for property taxes. That's probably more than 100 times more than the credit he'll get - yeah, your figure is absurd. Who knows, maybe he'll raise you rent to cover the rebate you want to scam from him.

 

[CTrain]

Is this like a credit you just get back or is this like a deduction if you itemize ??
If this is a deduction, I can't imagine you have enough deductions to offset the standard deduction which is $5350.

 

[xgsound]

Originally posted by: Gooberlx2

Originally posted by: MikeyIs4Dcats
why would you get property taxes back as a renter? You do not own nor do you pay the property taxes.

Apparently Minnesotans get refunds on rent....lucky bastards.

Maybe not. Once upon a time (before Gov. Ventura) the state tax was14% of gross.


Jim

 

[Stiganator]

It is completely separate from state and federal income taxes. It's form M1PR, not due until like August the next year, I think.

 

[sonambulo]

I'm assuming this works like Renter's Rebate in VT.

Did you sign a lease with your brother? If you didn't then you're probably going to have a real hard time getting at any kind of tax credit.