I have a strange request. One of my friends was audited for charging below fair market rent for two of his residential rentals. He was only renting a portion of each house and FMV rents don't apply since the renter didn't have full access to the property. The auditor isn't buying his story, even though it is true. The auditor requested a retro fair market rental analysis from 2008 and 2009.

Does anyone have a form I could use? I'd use a basic CMA, but 75% of the fields would not be applicable.

WTH? In NY you can't charge what you want for rent even if it is low?

It's Federal, not a Yew Nork law. Charging under FMV raises red flags for the people in D.C. Technically, you are required to charge FMV rent if you claim the deductions associated to a rental property.

His tax return would have likely flown under the radar, but there were some very unusual circumstances. A house he purchased could not be resold because an unclear title restriction required it to be purchased and resold by a charitable entity. A title company insured it and is eating the mortgage (free house). He'll need to repay them if it ever sells, but in the meantime he is free to use/rent it in any way he pleases, including pocketing any rent payments. The matter was taken all the way to the Yew Nork supreme court and was ruled in his favor.