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Updated over 9 years ago on . Most recent reply
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Should housemates' rent be claimed as income?
Hi all,
Can/Should a homeowner with housemates claim the income (rent) and a portion of expenses (landscape maintenance, cleaning service, utilities, home repairs) on taxes as a business expense, if it is the homeowner's primary residence? If so, are there any benefits to showing the income/expenses on tax returns for future investment property financing?
Thanks.
Most Popular Reply
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The answer to your first question is yes, income from housemates should indeed be included on your tax returns as well as the corresponding expenses of renting rooms in your house. In fact, not including the income on your tax returns is called tax evasion, which is a fancy word for fraud.
Will it help with financing? It depends on how long you have been reporting rent on your tax returns and how much income you are generating. It likely won't make a significant impact, but every bit will help in terms of conventional financing.