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Old 08-17-2010, 04:40 PM   #1
Longwell
Montana Master
 
Join Date: Jan 2006
Location: Grove City
Posts: 1,357
M.O.C. #5192
Anybody? How to avoid this taxation?

QUESTION: Have any of you volunteered at a park and, if so, (1) did you get the following documentation and (2) do you have a sample of what documentation we should use?
We definitely do not need to get into IRS trouble so any help with this will be greatly appreciated.

In reading an article about taxes for fulltimers at the "rversonline.org" site, I found the following:

"Note that income is not just salary. If you're getting a free RV space in exchange for helping out, you're getting income which is taxable. Depending on the going rate, you may be getting the value of, say, $20/night for helping out. If you do this for 10 nights, you have income of $200. But there is some rare good news in conjunction with this situation, which is not uncommon for RVers. Sec 119 provides if you're required as a condition of your employment to stay at the premises, the value of the lodging which you receive qualifies as "excludable income," meaning you don't have to report it on your tax return.

BUT (now hear this) you must document what you did and the value of nights lodging you received. You must of course report the amount of any salary you received. But it will be your responsibility to demonstrate, if challenged, what the value of the excluded income was. A good technique is to document the "going rate," plus the fact you were required as a condition of your employment to be there. It's a good idea to have the park manager sign your documentation. Keep the name of the manager, the phone number, dates, etc. Even keep a brochure which lists their rates. What's excludable is employer furnished meals and lodging. The W-2 filed by the RV park for your services at so many dollars per hour, while employed at an RV park, can trigger an IRS inquiry to the value of the meals and lodging you received as part of that engagement. That's why you'll need to have the documentation - in case you're challenged."
Larry
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