Hello, from the research I have done if a person pays you rent to live in your house it is taxable income. This can take out a significant chunk of money that you would be using to pay down your mortgage.
If the owner of the house pays the mortgage and the other person pays "daily expenses" do the daily expenses have to be claimed as income? Say for example, a friend living at your house would write out checks to pay cable, internet, water, sewer, heating, electric, etc? But not pay "rent" or any of the mortgage?
Thank you for any knowledgeable assistance
From what I understand the IRS will get you for not reporting the rental income. Even if you do not collect it when you should.
An arrangement to share expenses does not sound like a taxable event to me. Case in point. Two friends go on a short trip. Friend A owns the car. Friend B offers to pay for gas. Would friend A owe income tax because B paid for gas? Don't think so.
I would add that you need to share the cost of the utilities you mention. They can't pay 100%. Don't share the mortgage payment though.
I don't see any relevance between the car example and this particular scheme.
The tenant would pay for the utilities anyway.
Why not let everyone live free if they agree to pay for utilities?
You don't need to convince me, it's the IRS you should worry about....