House-sitting - is this barter income?
December 8, 2011 1:40 PM Subscribe
House sitting questions - taxes? lease? how does this work?
If someone is staying in a house that would otherwise be sitting empty, and they are house-sitting - what do we need to know?
The landlord has a house that is sitting empty. She is not interested in renting the house at this time, and wants to hold onto it for a while before she tries to sell it.
She found someone she trusts to house-sit, so they didn't have the problems of an empty house.
The utilities will remain in the landlord's name, and the person house-sitting will reimburse her, just for ease.
The person house-sitting needs some sort of documentation on where she lives for the usual reasons. Is a lease the way to go, or a house-sitting agreement?
Is this something where taxes figure into it? Will a 1099 need to be issued at the end of the year? If you're house-sitting, is it barter income? The landlord wasn't planning on renting the house anyway.
I tried googling, but came up with a bunch of professional house-sitting organizations. Can anyone point me to any resources?
Thanks!
If someone is staying in a house that would otherwise be sitting empty, and they are house-sitting - what do we need to know?
The landlord has a house that is sitting empty. She is not interested in renting the house at this time, and wants to hold onto it for a while before she tries to sell it.
She found someone she trusts to house-sit, so they didn't have the problems of an empty house.
The utilities will remain in the landlord's name, and the person house-sitting will reimburse her, just for ease.
The person house-sitting needs some sort of documentation on where she lives for the usual reasons. Is a lease the way to go, or a house-sitting agreement?
Is this something where taxes figure into it? Will a 1099 need to be issued at the end of the year? If you're house-sitting, is it barter income? The landlord wasn't planning on renting the house anyway.
I tried googling, but came up with a bunch of professional house-sitting organizations. Can anyone point me to any resources?
Thanks!
The person house-sitting needs some sort of documentation on where she lives for the usual reasons
Normally things like mail delivered to an address work for this. You don't have to be a lessee or otherwise financially entangled with a property to live there. For instance, my daughter does in fact live in my house even though her name is not on the mortgage, and the same would be true if I let my brother move in because he was unemployed.
"I live at Address X. It is not my property, it belongs to a friend of mine." is perfectly valid and does not mean you can't call it your home address.
posted by tylerkaraszewski at 2:19 PM on December 8, 2011 [1 favorite]
Normally things like mail delivered to an address work for this. You don't have to be a lessee or otherwise financially entangled with a property to live there. For instance, my daughter does in fact live in my house even though her name is not on the mortgage, and the same would be true if I let my brother move in because he was unemployed.
"I live at Address X. It is not my property, it belongs to a friend of mine." is perfectly valid and does not mean you can't call it your home address.
posted by tylerkaraszewski at 2:19 PM on December 8, 2011 [1 favorite]
What documentation does the house-sitter need? I've lived many places with no formal documentation. I just give my bank, magazines, other bills, etc. the new address.
If the landlord and housesitter want to 'make it official' they can write up a housesitting agreement, which isn't a bad idea especially with regard to utilities and the rights and responsibilities of each party.
I don't believe the IRS specifically addresses housesitting, while it does address bartering. The question is, is the owner exchanging housing for care-taking services, which for the IRS means both parties report fair market value payment and receipt? Or, is the owner gifting housing, which has a value. That's why most of these deals are between friends and under the table and no one reports anything.
posted by shoesietart at 2:25 PM on December 8, 2011
If the landlord and housesitter want to 'make it official' they can write up a housesitting agreement, which isn't a bad idea especially with regard to utilities and the rights and responsibilities of each party.
I don't believe the IRS specifically addresses housesitting, while it does address bartering. The question is, is the owner exchanging housing for care-taking services, which for the IRS means both parties report fair market value payment and receipt? Or, is the owner gifting housing, which has a value. That's why most of these deals are between friends and under the table and no one reports anything.
posted by shoesietart at 2:25 PM on December 8, 2011
If the person is paying utilities, I wouldn't call this "house-sitting." House-sitters get paid. It is more like utilities-only rental.
posted by lawhound at 3:05 PM on December 8, 2011
posted by lawhound at 3:05 PM on December 8, 2011
There is no "set form" for leasing or any other contracts, which is part of what keeps lawyers busy.Sure there are. I signed a Blumberg lease when I moved into my current apartment and most other people where I live (NY) have signed the same lease, plus a rider or two for various issues each landlord wants to address.
There's nothing stopping you from using any address in the world, though every utility company I've dealt with wants proof that you actually live there before they will acknowledge your request for services. (This is one of the issues adverse possession people face since they don't have a deed/mortgage/lease.)
Anyone who wants actual proof of residency (e.g., the DMV, the local park department) will usually accept a (you guessed it) a utility bill if you don't have a lease on hand. Oddly, cell phones are considered by many to be a utility bill however, you can get your cell phone bill sent anywhere, you don't need to prove that you reside there. I've used that trick before and a friend's address to "prove" that I've lived places I haven't.
posted by Brian Puccio at 3:13 PM on December 8, 2011
House-sitters get paid. That's not always true. I had a friend that did this when she was in college. She did it for the free housing. She got to stay in nice homes and didn't have to pay for an apartment or buy furniture. She stayed in the homes of professors while they were on sabbatical or were doing programs overseas. It worked out great for her and them. She was quiet, studious and not a partier. They didn't want a tenant, pets or kids. Everyone knew it was short term, a win/win for both.
posted by shoesietart at 3:40 PM on December 8, 2011
posted by shoesietart at 3:40 PM on December 8, 2011
The OP says the utility bills will stay in the landlord's name, but proof of address could be a letter from the landlord, confirming that the tenant does in fact live there. I've written these letters myself a number of times.
posted by ThatCanadianGirl at 4:53 PM on December 8, 2011
posted by ThatCanadianGirl at 4:53 PM on December 8, 2011
I do think a house-sitting agreement is a really good idea though, just to clarify everyone's expectations. I would certainly put one together if I was on either side of this arrangement.
posted by ThatCanadianGirl at 4:56 PM on December 8, 2011
posted by ThatCanadianGirl at 4:56 PM on December 8, 2011
If nothing else, you do want something resembling a lease or agreement because you want to clarify expectations about how this arrangement will come to an end and who will be paying for what. Does the house-sitter get some kind of notice when they have to move out or does he/she get tossed to the curb the instant a better offer comes along? What does "utilities" include? Is the landlord responsible for getting repairs done in a timely fashion?
posted by zachlipton at 5:16 PM on December 8, 2011
posted by zachlipton at 5:16 PM on December 8, 2011
Response by poster: The house-sitter is the care-taker of a minor child, and will need to get the child in school - she can contact the school, explain the situation, and see what information they will need to get her enrolled, if she has to have a lease, or not.
The house-sitter is simple occupying the house, so it is not quite as attractive for vandalism, etc - she's not really taking care of it (improvements, etc) in any way.
Thanks!
posted by needlegrrl at 5:18 AM on December 9, 2011
The house-sitter is simple occupying the house, so it is not quite as attractive for vandalism, etc - she's not really taking care of it (improvements, etc) in any way.
Thanks!
posted by needlegrrl at 5:18 AM on December 9, 2011
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IANAA, but I don't think 1099 would be necessary unless there are more than $XXX funds flowing "downstream." Where XXX was $400 a number of years ago when I looked it up. Selling a house at below-market price has special tax implications, but rental/lease rates for single-famliy homes are totally discretionary, so there should be no barter income considerations.
posted by markhu at 2:04 PM on December 8, 2011