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Do I need to claim anything on taxes for a family member who moved in and is contributing to household expense?

There is an inlaw apartment attached to my single family home. A family member moved in there and contributes a small amount per month to help with the extra expenses for utilities, maintenance, insurance and mortgage interest. She otherwise pays her own expenses for food, clothes, car, etc. Do I need to declare this on my taxes? The amount she contributes is less than half of the extra expenses of this additional space. If I do need to declare it should I use Schedule E? We both live here full time.

4 Answers

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  • 8 years ago
    Favorite Answer

    If she is part of your household, there is no tax consequence to her giving you money toward household expenses, and this does not appear on your tax return.

    If she is not part of your household, you are renting. If you are renting below market rates, the money she provides you is miscellaneous income. You can deduct expenses related to this income on Schedule A up to the amount of expense.

    If you are renting at market rates, use Schedule E.

  • Anonymous
    8 years ago

    Rental income is incurred when a person “contributes a small amount per month” to occupy property you own. Deduction of expenses is determined by multiple factors. I recommend that you consult with a tax expert possessing Enrolled Agent certification to properly identify your eligible tax deductions. Tax professionals searching this forum may want to learn more about complex elements related to rental income by exploring further education at http://fastforwardacademy.com/enrolled-agent-exam-...

    You write that the family member is living in an “inlaw apartment.” This implies that it is a separate dwelling unit. However, you state that it is “attached” to your home. A key feature of this matter is whether your family member is occupying a separate unit or the entire house with you. If you share your home, the normal process is dividing your total expenses between the rental use and the personal use based on the number of days used for each purpose. Renting to a family member for less than fair rental value counts as a personal use day. Again, hiring an Enrolled Agent assures that you obtain accurate tax calculations.

  • tro
    Lv 7
    8 years ago

    if you rent to a member of the family at less than the market value of the rental, you claim the income but you are not allowed to claim any expenses

    she obviously is not paying any rent

  • Judy
    Lv 7
    8 years ago

    No, she's sharing expenses, not paying rent.

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