Avoiding taxes on Rental Income

[Luke Predmore]

So I am about to start renting out part of my home. Is there a way that I can avoid paying taxes on the rental income? Could I have my renters pay my mortgage rather than pay me? Like have them give me a money order that's written out to the mortgage company every month instead of writing me a check?

[John Underwood]

That would still be considered income that you will legally need to pay tax on.

[Jeff Willis]

Luke:

I suggest you work closely with your accountant to help minimize your tax burden.  For someone to advise you on how to "avoid paying taxes on the rental income" is illegal and for you to intentionally "...avoid paying taxes..." would be of great concern to the IRS since it is a criminal violation. By posting this shows intent, thus could subject you to a possible stay at the Greybar Hotel.

[Natalie Kolodij]

It's all constructively received. 

Most rentals end up showing a loss on paper after applicable deductions and depreciation anyway. The same thing could end up being true here. 

You'll need to find an IRS acceptable way to allocate between your personal use sq footage and business/rental use sq footage and allocate appropriate  expenses accordingly. 

As a whole though- I'd recommend adjusting your mind. Working with a tax professional to pay as little tax as possible, legally - will help get you a lot further then publicly asking how to not pay tax on money you legally earned. That comes off as kinda sketchy and this is a platform for networking and sketchy doesn't bode well when you need to partner w/ someone on bigger deals. 

[Theresa Harris]

@Luke Predmore  You have to pay taxes on any income.  With rental properties there are different ways to reduce your taxes through various deductions.  There are expenses you can claim such as property taxes, insurance, interest on the loan, etc along with depreciation.  Talk to an accountant who can help you.

[Luke Carl]

Check out a book called Loopholes of Real Estate. This will have the answers you seek. 

[Caitlin Cartwright]

Quote from @Luke Carl:

Check out a book called Loopholes of Real Estate. This will have the answers you seek. 

 I read this in a Yoda voice 😄