Tax savings tip. Traveling for business to where your parents, family, or friends live? You can rent their guest room during your stay and deduct 100 percent of the cost while Mom and Dad receive tax-free income.

Sometimes it’s hard to find the time to visit with extended family or old friends with the crazy, busy lives we lead. The next time you travel for business, kill two birds with one stone—rent a guest bedroom from a friend, family member, or maybe even Mom and Dad.

After you’re finished working, visit with your friends and family, and get a tax deduction for the money you paid them for lodging. And this gets even better. They don’t pay taxes on the lodging income. It’s tax-free, and it creates a win-win for everyone!

Your deduction is a business travel deduction, and you need to follow the rules for that, as we explain below. Also, your Mom and Dad or whomever you paid needs to follow these three simple rules to ensure that the rental income remains tax-free to them. ... Log in to view full article.