Final Answer:
1) Yes because under specific circumstances and meeting certain criteria outlined by the IRS, a father can indeed claim a loss on his daughter's rental property.
Step-by-step explanation:
Yes, a father can claim a loss on his daughter's rental use property under specific circumstances. The IRS allows deductions for rental property losses if the owner meets certain criteria. First, the father must have an ownership interest or be considered at-risk for the property.
This usually involves being a co-signer on the mortgage or having direct financial involvement in the property. Second, the daughter's property must qualify as a rental property according to IRS guidelines. This means it should be used for income-generating purposes, rented at fair market value, and not predominantly for personal use.
Ultimately, while the father can potentially claim a loss on his daughter's rental property, meeting IRS criteria and complying with tax regulations is crucial to avoid potential audits or disputes with the IRS. Consulting a tax expert ensures adherence to the rules and maximizes the chances of successfully claiming such deductions.
If these conditions are met, the father can claim the loss on his tax return, subject to IRS limitations and rules regarding passive activity losses. It's crucial to maintain accurate records and consult a tax professional to ensure compliance with tax laws when claiming such deductions.