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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15185
Experience:  15years with H & R Block. Divisional leader, Instructor
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In RI, must a property owner claim income received from a roommate

Customer Question

In RI, must a property owner claim income received from a roommate who is staying in their home month-to-month? There is no rental or any type of written agreement. My roommate is trying to settle issues he alone has with the IRS, and they've asked for household income. He advised them that he's just "renting a room,", and that I'd be unwilling to provide financial info. Could they come after me?
Submitted: 6 years ago.
Category: Tax
Expert:  Robin D. replied 6 years ago.
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Robin D :

Hello and thank you for using Just Answer.

In the simplest terms, rental income is any payment received for the use or occupation of property. Most landlords operate on a cash basis. That means they count payments as income in the period they are received and deduct expenses in the period they are paid.
If you use the dwelling unit as a home and you rent it fewer than 15 days during the year, that period is not treated as rental activity. Do not include any of the rent in your income and do not deduct any of the rental expenses.
If you do not rent your property to make a profit, you can deduct your rental expenses only up to the amount of your rental income.
Report your not-for-profit rental income on Form 1040, line 21. For example, if you are filing Form 1040, you can include your mortgage interest and any qualified mortgage insurance premiums (if you use the property as your main home or second home), real estate taxes, and casualty losses on the appropriate lines of Schedule A if you itemize your deductions (or report your state or local real estate taxes on Schedule L if you do not itemize your deductions). Claim your other rental expenses, as miscellaneous itemized deductions on Schedule A (Form 1040), line 23.

If the renter is there more than 15 days and you are collecting rent from them, then yes you should report the amount. You will probably fit into the Not for Profit area though.

I sincerely XXXXX XXXXX information is helpful,

JACUSTOMER-envhag3a- :

I use the dwelling unit as a home year-round. The person living with me is my son's father, who also lives there year round. Our son's father contributes to the household expensesHe contributes towards household expenses and there is no profit to be made.

Robin D :

If he is not paying you rent then there is no rental income. If you and he did not have an agreement (written or verbal) that he is paying rent then his assistance could be considered a gift and the receiver of a gift is not subject to income on the value of the gift. If the giver gives more than $13,000 in one year to anyone person then they are responsible for filing Form 709 to report the gift they made. Still no tax is owed unless they go over their $1 million lifetime limit for gifts.
It appears you are in receipt of a gift and not rental income.