Define imputed rental income. Is imputed rental income taxed? Based on

Define imputed rental income. Is imputed rental income taxed? Based on your answer, discuss the tax code treatment of homeowners and renters on equity grounds.

What will be an ideal response?

ANSWER

Imputed rental income is what an owner-occupied home could be rented for if not owner-occupied. Imputed rental income is not taxed under the current tax code. On equity grounds, the non-taxation of imputed rental income is wrong because it does not treat the owners of rental housing and the owners of owner-occupied houses equally, since those who rent houses have to pay taxes on their rental income.