<prompt> Human: I own a house and am considering renting a room to a close friend of mine. If he paid me in cash as a gift, could I avoid paying income taxes on the money I receive?According to federal law, I could technically receive up to 15,000 in 2018 as a gift from any one friend or family member. If my friend were to gift me 475 per month to rent out a room in my house, could I consider that money a gift and thus avoid paying income taxes on it? Or would the IRS consider this illegal for some reason?  <response>: A gift cant have a quid pro quo. Ot has to be given with nothing gained in returns by the irss definition, that would be income.A stranger on the street could gift you 15k no problem, you could gift someone free rent no problem, but if those are the same person, than it wasnt a gift and is taxable.Dont commit tax fraud. 