Imagine this:

Tax deduction for you

Tax-free income for Mom and Dad

It doesn’t have to be Mom and Dad. The tax-free income can go to your brother or sister, or your best friend.

To make this work, you need to have a business reason to travel and stay overnight at the Mom and Dad Hotel.

Say you travel to a convention, rent your parents’ guest room for five days, and pay them $1,000 fair rent. You deduct the $1,000 as a business travel expense. Your parents have $1,000 of tax-free income.

Sound good? Great, let’s see how you can make this work for you by following three rules. ... Log in to view full article.