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Can You Claim a Tax Deduction for Hosting an Exchange Student

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  • 01-26-2015, 05:56 PM
    Who Knows?
    Can You Claim a Tax Deduction for Hosting an Exchange Student
    I was lucky to be chosen to host a student from China.
    The organization responsible for their stay will be giving me a stipend of $1200 a month on a 1099 form for room and board.
    I know I must report the income from the 1099, but are any expenses from that income deductible?
    I've searched through the IRS site with no results - any direction (to documents and forms) appreciated.
    Thanks! You are all so helpful (and sometimes amusing!)
  • 01-28-2015, 06:39 AM
    Mr. Knowitall
    Re: Can You Claim a Tax Deduction for Hosting an Exchange Student
    From what you were saying, the amount you received was a flat monthly fee that was paid without your having to document any expenses to the organization. As such, the payment would not be deemed to be part of a qualified expense reimbursement program, such that the amount reimbursed were not taxable. Payments made in the absence of an accountable cost reimbursement plan will result in your receiving a 1099-MISC, and are taxable.

    For hosting an exchange student placed by a qualified organization, if you provide the required supporting documentation, the IRS potentially allows a tax deduction of up to $50 per month, as described in Publication 526.

    How you might qualify for deductions from the income depends on how you declare it -- whether it could conceivably be classified as rent, or whether you try to report it as self-employment income based upon the substantial services you provide to the student. You would benefit from discussing your options with a tax professional.
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