Suppose Adam owns a house and rents a room to Bill for $300 a month, and pays Bill $300 a month to mow the lawn, clean the rooms and do other maintenance. Assume U.S. law in a no-income-tax state like Texas or Florida or New Hampshire. Bill must pay Federal income tax on $300 a month. Adam must give Bill a Form 1099-something each year. Adam must report the rental income. Can Adam deduct the money he pays Bill as maintenance costs?
Suppose Carl owns a house and allows Dave to live there rent-free in exchange for doing the yard work, cleaning and other maintenance. Does either owe tax? Is the value of the free rent income to Dave? Is the value of Dave's work income to Carl?
Suppose Edward owns a house and lets his girlfriend live with him. Does either owe tax? Based on what?