Tara is a taxpayer in the top tax bracket.She has a five-year-old daughter named Jane.Tara owns a small rental property.Tara has written into the lease that the monthly rent checks should be made payable to Jane.The checks are deposited into Jane's bank account.Jane enjoys the benefits of the rental income,and she will recognize the rental income on her tax return.

Question

Quizplus · Accepted Answer

This arrangement is unlikely to be considered legitimate by the IRS as it appears to be a scheme to avoid paying taxes. The rental income should be reported on Tara's tax return, not her daughter's.

Tara Is a Taxpayer in the Top Tax Bracket