Claiming Rent from Tennant as " Income " .....

[Michael Dunn]

Good Afternoon,

I have what is likely a basic question, but yet I am stumped on what the actual answer is.

My question is ...... I purchased a property via a Trustee , that had a Tennant/Renter living in the Mother-in-Law wing of this property for over 2 years .

Well I purchased this property 2 months ago and the Tennant is still in the Mother-in-Law wing renting it out .

Since I am now the new owner, can I not claim the Rent money as actual Income ?

Thank you for the input

[Jon Holdman]

Not only can you claim the rent as income, you must.  By that I mean, you must put it on your tax return, along with all the expenses.  You only pay tax on your net income, which is rent received less all expenses.  That's not easy to figure out, and your situation is complicated because the tenant is using only part of the property.  

But perhaps that's not your question.  Are you wanting to use that income to qualify for a loan?  You can, under some circumstances.  Again, though, its net income, not the amount of rent.  Many lenders will not include any rental income until you've had two tax returns showing the income.  And some may not count it at all in a situation like this if you're living in the property, too.