From: Austin, Texas

Dear TaxMama,

Can you tell me what I am doing in this transaction?

I am using an office free of rent or utilities. In exchange, I have to give this guy 10% of my earnings.

Is that considered contract labor? Bartering?

I am not sure how to put this down when I do my taxes.

Can you help?

Christina

Hi Christina,

You're paying rent.

Only, you're paying it on a sliding scale, as percentage of your sales.

So, when you write the check, simply record it as 'Rent' on  your books.

Best wishes,

Eva Rosenberg, MBA, EA