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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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I intend to rent two rooms of my 5 room apartment to a student;

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I intend to rent two rooms of my 5 room apartment to a student; we will each hve two rooms on either side of the kitchen; we will share the kitchen and the bath. I will pay the entire rent of $700.00 per month; the student will pay $350.00 plus 1/2 the utilities per month. Will I have to declare $350X12= $4200 as annual income when I file my US form 1040? Or, do I get to deduct $350 as an expense because I am giving up half my living space?

It sounds as you signed rental agreement with the landlord and signed sub rental agreement with a student.

If that is correct - you need to report rental income and rental expenses on the schedule E - http://www.irs.gov/pub/irs-pdf/f1040se.pdf - and will attach it to your tax return

Your rental income would be $350*12= $4200 - do not include security deposit if any.

Your rental expenses should d be prorated according to rental footage percentage: (footage of rented rooms plus 1/2 of common places) divided by total apartment footage.

The difference between the rental income and the rental expenses will be your rental income/loss and will be reported on the from 1040 - http://www.irs.gov/pub/irs-pdf/f1040.pdf line 17 - if zero - report zero.

 

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