However, the free use of lodging from an employer is excluded from gross income under Section 119 if the lodging is for the employer's convenience and the employee is required to accept the lodging as a condition of emplpyment.
It would not be a gift if the free rent were payment for something. For example, if a person said, if you overhaul my car, you can have free rent for six months, the fair market value of the free rent would be included in gross income under Section 61(a) as payment for the overhaul services rendered.
-Or, for example if it were payment for say... millions of dollars worth of polling business by... oh maybe... the Democratic party, ACORN, and a certain candidate running for national office.