Can I start to NOW claim Rent $ .........

[Michael Dunn]

Hi BP community,

I have a question regarding When I can claim Rent $ on a property as " Income"

My situation is this ......  I own a house that has a Mother-in-Law wing attached to it ( By Roof line only ) .

There is currently a renter in this property who has been renting it for right at 2 years now. The Renter pays $500 a month

My Note ( PITI ) on the property is $480

So with this Rent coming in, my note is 100% " Covered "

My question please is ..... This property ( the main part of the house is Primary Residence . I want to make sure that my new note of $480 des NOT become a negative via y DTI , as I hope to purchase another property in the future.

So if I can Immediately claim this Rental Income as Income , then it will technically be a wash( No Loss and No gain ) , and this will in theory keep my DTI in the good .

How do I go about claiming this Rental Income as ACTUAL Income that is coming in to me on a month to month basis , so by claiming it..... it can offset my House Payment ?

Thank so much, I really appreciate all of the help

[Natalie Kolodij]

You should have been reporting and paying taxes on this $6,000 worth of income every year for the past two years. 

Without having done that 

A. Your taxes are wrong - this is taxable income and not reporting it is illegal. 

B. You can't prove to any one you've had a renter / the income for two years because the tax return is what they use to confirm.