[I]f you crash at a friend's house for a few months without paying rent, you're supposed to count the amount you didn't pay in rent as gift income. You're fund

[I]f you crash at a friend's house for a few months without paying rent, you're supposed to count the amount you didn't pay in rent as gift income. You're fundamentally correct, but it's worth unpacking the logic here. First, the donor pays the gift tax, unless an agreement is in place for the recipient to do so. The controlling case is Dickman v. Commissioner, 465 U.S. 330 (1984), and the basic idea is that, if you have a recognizable property right, foregoing the commercial use of that property in favor of providing it at a discounted rate creates a recognized gift. The gift amount is determined by the fair market rental value of the property. (This gets around the concern of the poster below about how you're supposed to declare income you didn't receive.) Gift taxes are really just a method of checking large-scale tax evasion schemes where someone gifts assets to family members; to ameliorate the effects, there's a $14K/person/year exclusionary zone (plus other exemptions and methods to reduce liabilities) where you don't have to declare or worry about gifts. Technically, couch-surfing probably wouldn't trigger the IRS' interest (not sure even they would try to figure out the fair-market value of a couch and a blanket), but giving someone a room (let alone the full use of a rental property) would in fact be a taxable event. However, it's unlikely, even in the Bay Area, that the value of that would rise above the $14K/person gift exclusion. In Dickman, the parents had to give a lot of interest-free loans to trigger the IRS' interest.