apple0154
MEOW
He'd have to stay in it for two years. The IRS may decide it is investment property or a business. Since it's his only income, I would guess the IRS would treat it as a business. So the guy would pay regular income plus self-employment taxes..
If he didn't work at all. My example was to show the extreme. He could have had a part time job. The point is taxes are favored for the wealthy. Investments, capital gains, etc. Any money generated by money and not labor favors the wealthy.
Four people consume more in government services than one. John is not paying Bill's share. He's paying for his families share.
Bill isn't paying anything no matter how one looks at it. He is benefiting from the use of that money, tax free.