Let's say a married couple with children move in with their parents/in-laws for a year, and they're not paying rent to their parents/in-laws, but just helping with living expenses like food and utility bills. Can this affect the parent's/in-law's taxes or the married couple's taxes in any way?

For example, would their be a gift tax for the fair market value of the rent that is not paid?

How would anyone know?

Technically, and I'n not a CPA but have attended lots of finance-related classes in my job, if the IRS audits someone they can consider all sorts of gifts when figuring up the gifting limit. Car usage, paying bills for someone, forgiving debt, gifting a car or selling it way under FMV. But they have to be looking. Adult children with the same address as their parents might be a giveaway to some IRA auditor looking for something to do.

Damn. Our tax law is too complicated

This is not tax advice....

You are over-thinking it.

I have a cousin that lives with my grandmother and my other grandmother lived with my parents in her later years. In both cases the grandparent had earned income as did the other adults in the household and I am not aware of any tax situation that created.

If you are concerned about gift tax rules don't directly give them money.

Is this a Hunter Biden question? He paid his 49K a month rent to the big man.

No way would the amount of rent, at FMV, be high enough to prompt any gift tax reporting. Now set at $17,000 per year per donee, the FMV of the rent would have to exceed $17,000 to the husband, $17,000 to the wife, and I guess you could take the position $17,000 to each of the children living with the parents/parents-in-law. And double all those amounts if the parents/parents-in-law gift split. Of course any other gifts made during the year would go into the mix, but I doubt even including those items would the total be high enough to require any reporting.

If we're asking the govt to not tax us for living with a relative, then our tax system is completely idiotic. (Not you OP)

I am not sure immediate family living in a parents existing, primary residence would ever be subject to gift in-kind FMV analysis.

You would have to get into some unique circumstances to get the IRS to sniff at something like this. Like Joe letting Hunter hang out at $50k per month cash payments designed to launder money. Or letting your kids live rent free in a penthouse loft that is not a primary or even secondary residence. And if the latter, you likely have a CPA and lawyer who can figure out the best tax treatment.

As pointed out earlier, you are overthinking this.