Primary residence, living with tenant, report rent income?

Question

I am a first-time home buyer (bought condo in June) and am currently renting out one room to a tenant. This is my primary residence and I am paying all utilities, which is included in the rent I'm collecting. He has full house privileges.

I have spoken to many people and read many resources and the majority seems to be saying not to report this as income. Their reason for not reporting is because the 1040 schedule A covers renting out a place that is NOT a primary residence. Since both me and the tenant share all of the utilities, where is the line drawn for what percent can be claimed as expenses?

To include or not to include rent income?

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Answer 2

You do need to claim this as income...it is like a business incoem in that sense.  With a business in your home you are allowed to claim a percentage of the utilities such as electric, phone etc.  based on the percentage of area that is used for the business.  So, since this person is using 50% of the place then the percentage of phoen, electric, heat and what not would be 50% ...so you can use that for your deductions.

Answer 3

No.  You don't have to report if it's your primary residence and you rented out less than 14 days in a year.

Answer 4

By law you have to report all income.   It is pretty straight forward, ALL income.  

If you are having trouble because some people here are telling you otherwise simply call the IRS and ask them.

You may be able to find out online at irs.gov.

Answer 5

.   It is income.  Any income above $599 per year must be reported on a 1099 IRS form.  

Call the IRS 800-829-1040.  THey are very helpful.  They don't ask for your name or any info.  THey just help.

Answer 6

Depends on the tenant use the rent as deduction, if he is, you better report it. I won't report rent income if possible. We paying too much taxes already.  

Answer 7

so the ones saying no are just flat out wrong.  you legally have to report it. dosn't matter if it's your primary residence or not.

and you're right, the tenant can't claim his rent as a deduction (unless he's using it as a business, which it dosn't sound like)  who knows what that guy was thinking.

you will be able to deduct 50% of all utilities, and also some of the mortgage principal, but that's for you to discuss with your accountant.

the people saying you shouldn't report the income are simply condoning tax fraud.

Answer 8

NO!

Answer 9

You should report the income.

You not only report the income but expenses as well.

You'll need to file a Schedule E to report the rent that your tenant pays you.

You'll need to find the appraisal of the property to get the value of the land and building.

You will be depreciating the building using the residential depreciation tables.

You split the property taxes and interest in half. Put half on your Schedule A, where you itemize your deductions. Put the other half on Schedule E.

In addition to deducting the property tax and interest on Schedule E, you'll also be able to deduct half the cost of utilities, insurance, gardener, cleaning and any other kind of maintenance or repairs.

If you do any major improvements or remodeling, you'll be able to depreciate half the cost of that, too.

http://www.irs.gov/taxtopics/tc414.html